Home Crypto CFTC Commissioner Clarifies the Agency's Sweeping Rights to Regulate Crypto Derivatives

CFTC Commissioner Clarifies the Agency’s Sweeping Rights to Regulate Crypto Derivatives

The Commodity Futures Trading Commission (CFTC) can regulate all derivatives and futures buying and selling in US markets. In an announcement launched on Monday, the company’s Commissioner, Dawn D. Stump, claimed to clear up confusion about the company’s function on cryptocurrency-related merchandise.

Sign of The U.S. Commodity Futures Trading Commission (CFTC) on their headquarters building in Washington

According to Stump, the company has no regulatory powers to oversee commodities and securities as they could be categorised. However, all types of derivatives merchandise are underneath the purview of the CFTC.

“The CFTC doesn’t have regulatory authority over money commodities – that’s, the 03 CFTC doesn’t regulate commodities (or those that purchase, promote, or interact in actions relating to a money commodity). Rather, the CFTC regulates futures contracts on commodities and different derivatives merchandise resembling swaps,”

The commissioner stated, including even when a digital asset is a commodity, it’s not regulated by the CFTC. However, “the CFTC does regulate derivatives on digital belongings, identical to it regulates different derivatives.”

Stump stated it “consists of the regulation of buying and selling, clearing, and many others., of futures contracts and swaps on digital belongings – resembling the futures contracts on Bitcoin and Ether listed for buying and selling on numerous CFTC-regulated exchanges.”

The lack of readability on laws has prompted the CFTC to stand in opposition to the SEC in points bordering on cryptocurrencies. The commissioner highlighted the provisions in the Commodity Exchange Act (CEA) and a few Federal securities legal guidelines that give the businesses the authority to regulate derivatives merchandise bordering on belongings tagged as securities. This would require companies or traders to search extra readability on the proposed asset or funding product.

Commissioner Stump reiterated that the company has the energy to perform enforcement actions on companies that violate the CEA or any of its guidelines. A notable instance is the Seychelles-based cryptocurrency alternate, BitMEX, which not too long ago entered right into a $100 million settlement with the CFTC and Financial Crimes Enforcement Network (FinCEN).

Image supply: Shutterstock

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