As Cryptocurrencies Advance, CFTC Commissioner Encourages Formation of an SRO to Oversee Customer Protection

In the past year, cryptocurrencies have received increasing attention from fund managers, investors and the media. Regulators have also been focusing on cryptocurrencies, although a cohesive approach to regulating this developing asset class has yet to emerge. See “Funds and Managers Must Be Wary of State, in Addition to Federal, Regulatory Scrutiny of ICOs” (May 17, 2018); and “SEC Halts Registration of Cryptocurrency Mutual Funds, Calling for Dialogue Regarding Valuation, Liquidity, Custody, Arbitrage and Manipulation Risk” (Feb. 15, 2018). In a recent speech, CFTC Commissioner Brian Quintenz examined the role of regulators such as the CFTC during periods of technological change; discussed the use of blockchain technology by funds and managers; explored current approaches to cryptocurrencies by U.S. and global regulators; and called for the formation of a self-regulatory organization by cryptocurrency spot platforms to enforce customer protection rules in spot commodity markets. This article highlights the key points from Quintenz’s remarks. For more on the CFTC’s approach to cryptocurrencies, see “U.S. District Court Rules That Virtual Currencies Are Commodities Under the Commodity Exchange Act” (Apr. 12, 2018); and “Virtual Currencies Present Significant Risk and Opportunity, Demanding Focus From Regulators, According to CFTC Chair” (Feb. 8, 2018).

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