The US derivatives regulator, the Commodity Futures Trading Commission (CFTC), has warned derivatives clearing organizations (DCOs) about the risks involved in expanding clearing services into digital assets. DCOs are companies that match and settle derivative contracts based on an underlying asset such as a stock, bond or currency.
“In the past several years, the DCO’s Division of Clearing and Risk (CFTC) has noted increased interest by DCOs and DCO applicants in expanding the types of cleared products, lines of business, clearing models and services offered by DCOs, including with respect to digital assets,” it warned. Derivatives watchdog in a staff advisory report published on its website on Tuesday.
In the statement, the CFTC emphasized that its Dispute Resolution Center (DRC) will remain focused on the potential heightened risks associated with certain clearing activities even as registrants and applicants expand into new lines of business, change business models, or introduce new products. and innovative.
“DCR expects DCOs and applicants to actively identify new, evolving or unique risks and implement risk mitigation measures tailored to the risks these products or clearinghouse structure changes may present,” the CFTC said.
According to the announcement, providing advice to employees comes in light of increased cyber security and other risks related to digital assets.
“Today’s staff advisor specifically notes that due to the increased cyber and other risks that may be associated with digital assets, the DCR will confirm that the DCO applicant and registrant comply with DCO’s core principles of system collateral, conflict of interest, and physical delivery,” the Derivatives Monitor explained.
The CFTC is increasing scrutiny across industries
Meanwhile, the CFTC sued 14 retail forex traders in April alleging fraud that they were registered with the agency. The accused entities, which include Trade FX, Bit Block FXtrades, Bit Trading and Bitfinmarket.com, have been charged by the regulator for claiming to be members of the National Futures Association (NFA).
Moreover, the CFTC does not spare the big players either in its efforts to sterilize the industry that falls within its purview. Recently, the commission imposed a fine of $45 million on HSBC Bank USA for “fraudulent trading and deception”. The agency also accused the lender of failing to keep a record of its business calls.
In the crypto space, the CFTC in March sued Binance, the largest crypto exchange by trading volume, for allegedly violating the Commodity Exchange Act (CEA) and CFTC regulations. Under the case, Binance founder Changpeng Zhao is also facing scrutiny.
Huobi HK launch; US Approves Eurex BTC Futures; Read nuggets today.
The US derivatives regulator, the Commodity Futures Trading Commission (CFTC), has warned derivatives clearing organizations (DCOs) about the risks involved in expanding clearing services into digital assets. DCOs are companies that match and settle derivative contracts based on an underlying asset such as a stock, bond or currency.
“In the past several years, the DCO’s Division of Clearing and Risk (CFTC) has noted increased interest by DCOs and DCO applicants in expanding the types of cleared products, lines of business, clearing models and services offered by DCOs, including with respect to digital assets,” it warned. Derivatives watchdog in a staff advisory report published on its website on Tuesday.
In the statement, the CFTC emphasized that its Dispute Resolution Center (DRC) will remain focused on the potential heightened risks associated with certain clearing activities even as registrants and applicants expand into new lines of business, change business models, or introduce new products. and innovative.
“DCR expects DCOs and applicants to actively identify new, evolving or unique risks and implement risk mitigation measures tailored to the risks these products or clearinghouse structure changes may present,” the CFTC said.
According to the announcement, providing advice to employees comes in light of increased cyber security and other risks related to digital assets.
“Today’s staff advisor specifically notes that due to the increased cyber and other risks that may be associated with digital assets, the DCR will confirm that the DCO applicant and registrant comply with DCO’s core principles of system collateral, conflict of interest, and physical delivery,” the Derivatives Monitor explained.
The CFTC is increasing scrutiny across industries
Meanwhile, the CFTC sued 14 retail forex traders in April alleging fraud that they were registered with the agency. The accused entities, which include Trade FX, Bit Block FXtrades, Bit Trading and Bitfinmarket.com, have been charged by the regulator for claiming to be members of the National Futures Association (NFA).
Moreover, the CFTC does not spare the big players either in its efforts to sterilize the industry that falls within its purview. Recently, the commission imposed a fine of $45 million on HSBC Bank USA for “fraudulent trading and deception”. The agency also accused the lender of failing to keep a record of its business calls.
In the crypto space, the CFTC in March sued Binance, the largest crypto exchange by trading volume, for allegedly violating the Commodity Exchange Act (CEA) and CFTC regulations. Under the case, Binance founder Changpeng Zhao is also facing scrutiny.
Huobi HK launch; US Approves Eurex BTC Futures; Read nuggets today.