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The short announcement published on October 21, 2020, from the swaps division of the Commodity Futures Trading Commission (CFTC), the Division of Swap Dealer and Intermediary Oversight (DSIO), provides advice and guidance on how FCMs across the U.S. should handle cryptocurrencies and virtual assets. The post further digs in on how ‘to hold and report certain deposited virtual currency from customers in connection with physically-delivered futures contracts or swaps.'

The U.S. government is gradually regulating the field, learning how to govern the blockchain and cryptocurrency innovations. The advisory note aims to regulate FCMs holding virtual assets and the risk management processes when accepting cryptocurrency deposits from customers.

Joshua B. Sterling, Director of the DSIO, stated the commission's core value is to offer clarity and protection to market participants hence the latest advisory note. He further stated,

“The CFTC is committed to fostering responsible fintech innovation and improving the regulatory experience of registered firms where doing so is consistent with our rules.

This advisory furthers these critical goals and will provide additional certainty on these issues as the Commission works to establish a holistic framework for digital asset derivatives.”

Futures Commission Merchants refer to institutions, trusts, corporations, associations, and partnerships that accept orders “for the purchase or sale of any commodity for future delivery.” They also accept payments and give credit to any party that has their orders accepted on the futures markets.

The post CFTC’s Swaps Division Releases Advisory Note To Futures Merchants On Holding Virtual Currencies first appeared on BitcoinExchangeGuide.

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