The US Commodity Futures Trading Commission (CFTC) is developing “heightened review” process for virtual currencies, Reuters has reported.
During a speech at an industry conference in Florida last week, the CFTC chairman J. Christopher Giancarlo introduced an eight-point checklist for regulators to follow when exchanges plan to launch new cryptocurrency-related products.
“In crafting its process of ‘heightened review’ for compliance with core principles, CFTC staff prioritized visibility and monitoring of markets for bitcoin derivatives and underlying settlement reference rates,” Giancarlo said, as quoted by Reuters.
The new list is an enhanced version of the seven-point list the watchdog used to review the Bitcoin futures launched by Cboe Global Markets and CME Group in December.
“For all reviews of new virtual currency derivatives, Designated Contract Markets (DCM) and Swaps Execution Facilities (SEF) will be asked to disclose to the CFTC what steps they have taken in their capacity as self-regulatory organizations to gather and accommodate appropriate input from concerned parties, including trading firms and FCMs (futures commission merchants),” Giancarlo said. “Further, I have asked staff to take a close look at Derivatives Clearing Organizations (DCO) governance around the clearing of new products and to consider recommendations for possible further action.”
The CFTC faced criticism over its handling of Cboe’s and CME’s respective Bitcoin futures launches. Some industry participants, including the Futures Industry Association, claimed that the watchdog had not been adequately consulted over the launches and criticised its decision to allow exchanges to “self-certify” the contracts.
However, Giancarlo indicated that the watchdog would continue to allow exchanges to self-certify products. He defended the self-certifying process, saying that its goal was to ensure that “innovative derivatives products would not be hampered by cautious regulators conscious of the political risks of approving new products”.
In today’s trading, the Bitcoin price stood at $8,602.99, as of 14:46 GMT. The cryptocurrency has lost 8.2% in the past 24 hours, according to data from Coinmarketcap.
For further information on how to buy and trade Bitcoin, see our comprehensive Bitcoin guide.