CFTC Imposed a New Regulation on Crypto Derivative Products

CFTC Imposed a New Regulation on Crypto Derivative Products

June 7, 2018 Off By Steven Anderson

The top markets regulator in the US has issued a new rule to exchanges and other trading platforms which are interested in listed BTC futures and other virtual currencies derivative products.

The CFTC or Commodity Futures Trading Commission recently released this new regulation, giving exchanges and other trading platforms with a set of steps to follow as they create and launch these emerging virtual currency derivative products.

Exclusively, the Commodity Futures Trading Commission advised trading platforms to track the reliability of the basic spot markets which provide their pricing data, closely coordinate with the staff of the CFTC, solicit remarks and annotations from industry participants before the launch, as well as engage in big trader reporting.

The staff of Commodity Futures Trading Commission is committed to offering regulatory intelligibility as much as possible, according to Amir Zaidi who happens to be the Director of the Commission’s Division of Market Oversight. He also added that, while the crypto market keeps on evolving, the staff of CFTC will seek to give additional leadership and supervision to assist market participants in keeping pace with the latest development while complying to the latest regulations imposed by the organization.

Commodity Futures Trading Commission staff is offering this information, in part, to assist market participants in their hard works to design risk management plans which solve the new threats imposed by crypto related products, said by Brian Bussey, Director of CFTC Clearing and Risk Division.

What is more, the new rule is intended to help make sure that market participants follow right governance procedures concerning the commencement of these products.

The latest ruling appears to be a reply to a lot of business complaints which the Commodity Futures Trading Commission has failed to scrutinize sufficiently the initial bitcoin futures product before their launch in December. Up to now, the markets have acted in an orderly way. On the other hand, critics are afraid that this can alter as number increases and crypto exchanges launch produces for smaller virtual currencies such as ripple and ethereum.

As reported by CNN, CME- the biggest and most popular exchange which provides bitcoin futures trading located in the United States- recently joined with many virtual currency exchanges. They plan to make a standard value for one of the most popular cryptocurrencies today, (ETH), resulting in rumor that the venue will soon become the first platform in the US to provide ether futures product.