- Advertisement -
The US Commodity Futures Trading Commission is taking a closer look at its rules governing risk management with an eye toward digital assets.
The agency published an advanced notice of proposed rulemaking on Thursday, seeking public comment on risk management requirements for swap dealers and futures commission traders.
CFTC Commissioner Christy Goldsmith Romero said in a statement on Thursday that one of those risks could be crypto.
Goldsmith Romero said that several brokers have shown interest in digital assets, while highlighting the risks that arise from crypto derivatives.
“Unregulated spot markets carry additional risks as seen with the collapse of FTX, Terra Luna, Celsius and many others resulting in substantial losses. This is in addition to the operational risks and risks associated with rampant fraud and illicit finance in certain parts of the crypto markets,” Goldsmith Romero said.
Goldsmith Romero said the failures of banks such as Silvergate Bank and Signature Bank also exposed the risks in the industry.
“These technological advances, with their accompanying risks, require the Commission to review our regulatory oversight, including our risk management requirements,” the commissioner said.
Emerging technologies such as digital assets, artificial intelligence and cloud services have also emerged as sectors that can carry significant risks.
The commissioner also pointed to the custody of digital assets.
“Digital assets raise a number of issues regarding the protection of client assets that were not considered at the time of the 2013 risk management rule or the Commission’s client protection rules for brokers to separate client assets from company assets. “
Comments are due in 60 days, after which the agency may decide to make a formal proposed rulemaking.
CFTC Action in the Crypto Space
The agency has issued a warning Earlier to firms providing clearing services for crypto this week and said it has seen “increased interest by DCOs”. [derivatives clearing organizations] and in the expansion of the types of products and business lines, clearing models and services offered by DCOs to DCO applicants, including those relating to digital assets.
The agency has brought charges against crypto firms including crypto exchanges over the past year binance For offering unregistered crypto derivatives trading products in the US.
