On February 12, 2019, the US Commodity Features Trading Commission (CFTC) released a new set of examination priorities for several departments. One such arm, the Division of Market Oversight (DMO), will be monitoring as well as analysing cryptocurrencies and block trading via surveillance practices. Other divisions will be extremely focused on these aspects as well.
The CFTC’s Goal
With setting these expectations and priorities, the CFTC aims at providing stricter control on the way cryptocurrencies and block trading are examined through surveillance services. The release of their priorities confirms the efforts of the Securities and Exchange Commission (SEC) as well.
The CFTC will focus on cryptocurrencies as a continuation of its’ engagement with responsible innovation. In October 2017 the agency released a primer on virtual currencies and a primer on smart contracts. These documents aimed at clarifying the risks and problems that might arise in relation to cryptocurrencies and smart contracts.
These efforts of the CFTC are all focused towards the promotion of cybersecurity, especially in connection with the block technology, and consequently cryptocurrencies. As the agency’s main function is to monitor and regulate the commodities markets, cryptocurrencies are one of the main priorities for them. CFTC chairman J. Christopher Giancarlo commented:
“I commend DMO, DSIO and DCR leadership and staff for their work to bring additional transparency into the CFTC agenda in order to ensure that registered market participants devote adequate compliance resources consistent with our regulatory priorities,”
Stepping in Too Far
While the CFTC is raising attention around cybersecurity, in September 2018, J. Christopher Giancarlo emphasised the importance of measured actions that intervene in the cryptocurrency ecosystems.
In an interview for CNBC, he commented that authorities have to be “vigilant against manipulation”, however, should look out for inhibiting spurs of innovation and development when they adopt regulations regarding cryptocurrencies. This is an important clarification because the CFTC does not want to disrupt the balance in the developing world of cryptocurrencies, as too much regulation and excessively strict regulation will stifle innovation.
The CFTC’s release of the new examination priorities comes after critique that authorities are moving too slow when it comes to regulating this type of commodities. In retaliation to these claims. Giancarlo commented:
“Some would say we’re too slow, others have said we’ve been too fast. So, we at the CFTC saw the very first regulated offerings of bitcoins futures,”