CFTC Issues Guidance for Firms Offering Cryptocurrency Derivatives
The U.S. Commodity Futures Trading Commission (CFTC) has released new guidance for clearinghouses and exchanges planning to list cryptocurrency-related derivatives products.
Published Monday, the joint advisory from the agency’s Division of Market Oversight (DMO) and Division of Clearing and Risk (DCR) provides companies with “regulatory clarity” around such products, a press release states.
The advisory addresses areas including market surveillance, large trader reporting, risk management and governance, and coordination with CFTC members, describing them as “key areas that require particular attention.”
DCR director Brian Bussey said the new guidance would help market participants to develop risk management programs specifically for cryptocurrency products, according to the release.
“In addition, the guidance is designed to help ensure that market participants follow appropriate governance processes with respect to the launch of these products.”
The guidance notably comes a week after CME Group announced it was launching an ether reference rate and real-time ethereum price index in partnership with digital asset trading service Crypto Facilities, as reported by CoinDesk.
U.K.-based Crypto Facilities, which already provides CME Group with bitcoin reference indices, launched the first regulated ethereum futures contracts earlier this month. While CME Group has not confirmed it is launching ether futures, the new reference rates hint at the possibility.
And, just last week at at CoinDesk’s Consensus 2018 conference, CFTC enforcement director James McDonald told an audience that the agency is trying to avoid “hindering innovation” when it comes to regulating the cryptocurrency and derivatives markets.
“Our mission is to foster financially sound markets, and we understand as a regulator that requires a certain amount of [flexibility] in our approach,” he said.
CFTC logo image via Shutterstock
You may be interested
Coinbase Acquires Blockchain-Tracking Startup Neutrino for Undisclosed Pricebtcethereumadmin - February 19, 2019
Coinbase has acquired blockchain analytics startup Neutrino as part of a wider push to offer more diverse crypto assets across…
Bitcoin Price Crosses Key Long-Term Hurdle For First Time in 9 Monthsbtcethereumadmin - February 19, 2019
View: Bitcoin has passed through the 100-day moving average for the first time in 272 days. The primary lower-high trend…
Germany Seeking Industry Feedback for National Blockchain Strategybtcethereumadmin - February 19, 2019
The German government is seeking industry feedback ahead of developing the country’s blockchain strategy by the summer. A Reuters report…