Last week, the acting president of Commodity Futures Trading Commission (CFTC), Caroline Pham, announced a crypto sprint, after the publication of the report on digital assets of the White House. While the Congress debates the legislation, it has unveiled proposals to use existing CFTC licenses to cover crypto trading. Consequently, the CFTC invites public plans on the plans to apply the term exchange rules – contractual markets or designated DCMS – to identify cryptographic transactions. The comments are open until August 18. There is no questionnaire.
The announcement is quite concise, but a deeper explanation is provided in an opinion article written earlier this year by the acting chair. It explains the cost of the private sector and the complexity of the implementation of new rules. Consequently, it is opposed to the idea of an American version of the Mica regulations built by Europe. Instead, it recommends applying current regulations in a neutral technological manner.
The CFTC has existing regulatory powers concerning participants in retail trade on the exchange market which could be extended to cover the cryptography sector. Consequently, entities that already have licenses as a term commission merchants (FCMS) for the FX retail trade or as a exchange dealers (RFED) could instantly support retail crypto transactions as brokers. For exchanges, the CFTC could also extend its existing contractual contract market license (DCM) to encompass the crypto. This DCM expansion is what is suggested in the current commentary phase.
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