- This idea was expressed by Commissioner Christine Johnson
- She believes all clearing organizations should be subject to the same rules
The CFTC’s Division of Clearing and Risk (DCR) has issued a formal warning to DCOs regarding the risks of cryptocurrency.
Moreover, Commissioner Christine Johnson, a representative of the regulator, advocates the creation of a full regulatory framework for this class of organizations, taking into account the specifics of CA.
We note that a DCO is a kind of intermediary, which offers services of offsetting (redemption) of liabilities.
In the U.S., such counterparties are in the jurisdiction of the CFTC (Commodity Futures Trading Commission).
The regulator’s statement said that some clearing companies have expanded their offerings. In particular, this applies to working with cryptocurrency companies.
DCR expressed concern and instructed counterparties to examine and take control of potential risks.
Companies should look first at potential conflicts of interest, cybersecurity requirements and reliability of custodial services.
Commissioner Christine Johnson went even further. She urges the agency to develop a comprehensive list of regulatory requirements for DCOs that deal with cryptocurrency business.
Politician insists on using a “same risk same regulation” approach. It would extend DCR requirements to all entities that conduct clearing activities, albeit indirectly.
Otherwise, there is a risk that more and more platforms with minimal protection for investors will appear on the market.
We previously covered a statement by a former CFTC member who classifies ETH as both a commodity and a security.
This explains, albeit partially, the conflict of interests of the two regulators in terms of oversight of the cryptocurrency market.