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CFTC Amends Act To Clarify Crypto Derivatives

In a recent meeting: the U.S. Commodities and Futures Trading Commission (CFTC) voted in favour of a bill specifying the stipulations applicable to the commission when collecting information pertaining to the cryptocurrency derivatives markets. As a result, the bill will be forwarded for final judgement at the House of Representatives.

This new bill proposes a handful of  amendments to the 2019 CFTC Reauthorization act, in particular section SEC 109: ‘Digital Commodity’. Proposed changes are intended on helping to clarify methods and protocol as they apply to the CFTC when collecting information on “digital commodities contracts and commodity swaps.

Amendments such as,

“With regard to a contract on the contract market that references a digital commodity available on a cash market, the Commission shall adopt rules detailing the content and availability of trade and trader data and other information the board of trade must be able to access from the referenced cash markets and data sources in order to comply with this paragraph.”

Amendment #1

“(B) Digital Commodity – with regard to a swap on the swap execution facility that references a digital commodity available on a cash market, the Commission shall adopt rules detailing the content and availability of trade and trader data and other information the swap execution facility must be able to access from the referenced cash markets and data sources in order to comply with this paragraph.”

Amendment #2

The CFTC has been intensifying its investigations into cryptocurrency fraud and scams over the past year (and especially within the last six months), resulting in the establishment of landmark legal decisions which may lay the groundwork for future policy and lawmaking regarding digital asset tokens.

In late October, CFTC chairman Heath Tarbert announced that the commission’s specialist fintech and cryptocurrency division ‘LabCFTC’ was being spun off into its own fully-fledged office. Earlier in the same month, the CFTC issued a joint statement alongside the Financial Crimes Enforcement Network (FinCEN) and the Securities Exchange Commission (SEC); warning those who regularly transact using cryptocurrencies that regular banking laws apply to such activities.

Finally: on November 8th, the CFTC gave approval to crypto derivatives exchange Tassat, which is classified as a ‘Swap Execution Facility (SEF). Tassat joins the ranks of SeedCX and LedgerX, the last two organisations to achieve such approval.

“The sound regulation of our derivatives markets, which see more than $4 trillion in notional activity each day, is critical to the health of the U.S. economy and the pocketbook of every American…

I look forward to working with members of both parties in both chambers to see a bill through to completion.”

Heath Tarbert, via CoinDesk