If 2017 promises to go down in history as the year of an unprecedented cryptocurrency boom, then 2018 seems to risk becoming the year of global regulation of the crypto industry.
The Commodity Futures Trading Commission (CFTC) appears to have learned from past mistakes and criticism of its early Bitcoin futures products. According to critics, the CFTC was not ready to launch the first regulated Bitcoin futures products or to actively protect newly established markets. However, within half a year of its existence, the derivatives market has grown thanks to a new underlying asset — cryptocurrency. At the end of last month, the CBOE stock exchange saw a record volume of sales of Bitcoin futures contracts. During May, there is a tendency for a slight increase in the total number of contracts and the number of large traders almost weekly.
The market is increasing volumes and offering new products for altcoins. May 11, the British crypto exchange Crypto Facilities launched trading in futures contracts on Ethereum. In addition to ETH futures, the crypto exchange already trades Bitcoin and XRP futures contracts. In early May, Goldman Sachs announced futures trading in Bitcoin.
Like any other financial instruments, crypto derivatives must exist within a legal framework. The intensive development of trading in financial futures and options obliges the CFTC to focus on protecting participants in the cryptocurrency derivatives market. The developed methodological recommendations are intended for sites planning to introduce derivative products from cryptocurrency derivatives.
New recommendations require coordination with the CFTC.
- The launch of a new product should be preceded by consultation with representatives of government financial regulators.
- Exchanges are required to monitor spot cryptocurrency markets that provide their price data.
-Trading platforms for the sale of derivatives must participate in the reporting of large traders, but such a threshold for positions or volumes has not been established.
According to the agency, these operating rules will bring regulatory clarity and help develop risk management programs for new cryptocurrency financial products..
It should be noted that the CFTC monitors the implementation of the Commodity Exchange Act, and determines the status of cryptocurrency by the US Securities and Exchange Commission (SEC). Considering the intensive development of the futures market, the CFTC called on the regulator to determine the status of the Ethereum cryptocurrency as quickly as possible.
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