New US CFTC Guidelines: Encrypted Derivatives Companies Should Be Careful in Holding Client Funds

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According to the guidelines issued on Wednesday night, the US Commodity Futures Trading Commission (CFTC) recommends that companies engaged in crypto derivatives trading be cautious in holding client funds.

The new guidelines continue the CFTC’s interest in formulating rules for custody of virtual currencies, which is a field that is clearly different from any other asset class. According to CFTC guidelines:

“Virtual currency custodians are usually not subject to the comprehensive federal or state supervision and supervision system, which includes the protection of these new assets, which also brings potential risks to the protection of client funds held by these custodians.”

The specific provisions of the guidelines limit the places where a “future commission merchant” (FCM) can store virtual currency of customers to “a bank, a trust company or another FCM, or a clearing institution that clears virtual currency futures.”

In addition, the CFTC warned FCM that they need to deposit such deposits in accounts that are clearly marked as customer funds and are not allowed to allow gains in one account to make up for losses in another account.

In fact, this guideline seems to be the most certain that customers’ cryptocurrency funds must remain safe and unaffected, and FCM is prohibited from trading such funds for collective gains. The issue of FCM trading cryptocurrency deposits has not yet been resolved, but you can definitely imagine the catastrophic consequences of crypto futures traders’ decision to use cryptocurrency funds to invest in some unstable markets.

The CFTC has been busy establishing an overall framework for encrypted assets. Earlier this month, the European Commission promised to protect the “emerging markets” of these assets. This statement was issued immediately after announcing that it was tracking BitMEX operating an unregistered derivatives exchange in the United States.

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