New Cryptocurrency Derivatives Guidance Released By CFTC
Cryptocurrency exchanges and other trading platforms that are keen in listing bitcoin futures and other cryptocurrency byproducts have received a new guidance released by top US regulator.
On Monday, the Commodity Futures Trading Commission (CFTC) issued this guidance, giving exchanges a set of best practices to guide them as they improve and launch these promising cryptocurrency byproducts.
The CFTC precisely instructed trading venues that they must have the ability to keep track of the integrity of the essential spot markets that supply their pricing data, coordinate effectively with CFTC staff, seek comments from industry participants before launch, and take part in trader reporting.
“The CFTC staff is committed to providing regulatory clarity as much as possible,” said Amir Zaidi, the director of the commission’s division of market oversight. “As the virtual currency market continues to evolve, CFTC staff will seek to provide additional guidance to help market participants keep pace with innovation while complying with CFTC regulations.”
“CFTC staff is providing this information, in part, to aid market participants in their efforts to design risk management programs that address the new risks imposed by virtual currency products,” added Brian Bussey, the director of the commission’s division of clearing and risk. “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 new guidance comes as a response to the disapproval of the industry given that the CFTC had not been able to effectively monitor the first bitcoin futures products before it was launched in December. Since then, those markets have performed in the right way, however, critics dread that this trend will change as volume increases and exchanges introduce products for smaller cryptocurrencies like ether and ripple.