US CFTC Issued New Recommendations
CFTC US Commodity Futures Trading Commission – Issued a new recommendation for the FCM futures commission trader, holders of digital currency on segregated accounts.
Regulators have clarified how the provisions of the Commodity Exchanges and Customer Protection Act apply to digital currencies deposited by futures customers. The CFTC said new custody guidelines for FCM require disclosure of the digital currency that clients must deposit in connection with the delivery of futures contracts or swaps.
The CFTC is committed to promoting financial technology innovation, improving regulations and issuing a new recommendation through its swap dealers and intermediary oversight agency DSIO.
Joshua Sterling said: The CFTC is committed to promoting financial technology innovation and improving the practice of regulating registered companies in accordance with our rules. The consultations are ongoing. These key objectives will provide more clarity on these issues as the committee intends to create a common framework for digital asset derivatives.
In the cover letter, the regulator considered in detail the recommendations regarding the acceptance and storage of clients’ cryptocurrencies by FCM. The note to the recommendation states that the new advisory opinion does not apply to cryptocurrencies held by FCM on behalf of clients trading futures or options in foreign markets.
The CFTC said that holding customers’ digital currencies as segregated funds increases the risks of FCM customers. Due to the fact that digital currencies have a certain degree of risk, unlike other well-known depository institutions such as banks or trust companies.
The CFTC explains the new recommendations by the fact that in recent years, in the light of hacker attacks, multibillion-dollar damage has been caused to the owners of digital currency.
Therefore, the fundamental principle that FCM must adhere to in order to reduce risks and increase security is the storage of customers’ digital currency in a bank or trust company.