CFTC Puts Breaks on ICE's Bitcoin Futures Plans
- The regulator appears to be opposed to the exchange operator's custodial and collateral plans
Intercontinental Exchange’s (ICE) plans to launch bitcoin futures have been scuppered - again - by US regulators.
The exchange operator originally planned to launch the new products in November of last year.
But the Commodity Futures Trading Commission (CFTC) has refused to give its approval to the new service.
Bakkt - ICE’s name for the project - ran afoul of the regulator over its plans to store customers’ bitcoins.
According to the Wall Street Journal, the CFTC told ICE in February that its custodial plans would require public disclosure of its business plan and a public comment period.
It appears that ICE has not agreed to those terms and that the dispute between the exchange and the regulator is continuing.
Thus, regulators are unsure as to how they should be treated and have, in many cases, simply transplanted old regulations on to a new product.
Collateral regulations in the world of Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term
In prior announcements, ICE has said that it would settle bitcoin futures transactions on a daily basis.
That would mean that firms trading in those futures would, depending on whether they had gained or lost money, accept bitcoin from Bakkt or deposit the cryptocurrency into the exchange’s digital vault.
Alongside these custodial problems is the matter of collateral. When trading in futures, firms will typically put down collateral in fiat currency.
But in the case of Bakkt’s bitcoin futures, though the principle of putting down money is the same, collateral could be paid in cryptocurrency.
That raises problems for the CFTC as the regulator is yet to have dealt with such a situation before.
How the regulator and exchange operator will eventually resolve their differences remains unclear. In the meantime, the cryptocurrency bear market continues unabated.
Intercontinental Exchange’s (ICE) plans to launch bitcoin futures have been scuppered - again - by US regulators.
The exchange operator originally planned to launch the new products in November of last year.
But the Commodity Futures Trading Commission (CFTC) has refused to give its approval to the new service.
Bakkt - ICE’s name for the project - ran afoul of the regulator over its plans to store customers’ bitcoins.
According to the Wall Street Journal, the CFTC told ICE in February that its custodial plans would require public disclosure of its business plan and a public comment period.
It appears that ICE has not agreed to those terms and that the dispute between the exchange and the regulator is continuing.
Thus, regulators are unsure as to how they should be treated and have, in many cases, simply transplanted old regulations on to a new product.
Collateral regulations in the world of Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term
In prior announcements, ICE has said that it would settle bitcoin futures transactions on a daily basis.
That would mean that firms trading in those futures would, depending on whether they had gained or lost money, accept bitcoin from Bakkt or deposit the cryptocurrency into the exchange’s digital vault.
Alongside these custodial problems is the matter of collateral. When trading in futures, firms will typically put down collateral in fiat currency.
But in the case of Bakkt’s bitcoin futures, though the principle of putting down money is the same, collateral could be paid in cryptocurrency.
That raises problems for the CFTC as the regulator is yet to have dealt with such a situation before.
How the regulator and exchange operator will eventually resolve their differences remains unclear. In the meantime, the cryptocurrency bear market continues unabated.