14 January 2018

US Corporate Law News: CFTC to convene in late January 2018 to discuss issues relating to policing activity on virtual currency

Amid rising concerns over the risks digital currency poses to the financial system and investors, CFTC's Market Risk Advisory Committee will be holding a public meeting on January 31, 2018 to discuss the self-certification process for the listing of novel products (including cryptocurrencies such as bitcoin) and its oversight authority over such products. Although the CFTC has been increasing its oversight authority over the cryptocurrency market, its power to actively block exchanges from launching futures products is limited. Under current CFTC regulations, exchanges are allowed to list futures products by simply filing a self-certification with the CFTC, with no prior CFTC approval. Bitcoin surged more than 1300% in 2017 and prompted CME Group Inc and CBOE Global Markets Inc. (Chicago's two largest derivatives exchanges) to launch bitcoin futures in December 2017. The CFTC's pending meeting is in response to the rapid growth of the cryptocurrency market, raising novel concerns over its regulatory oversight and investor protection. For more information, see https://www.reuters.com/article/us-usa-cftc-bitcoin/u-s-derivatives-regulator-to-review-bitcoin-futures-risks-idUSKBN1ET20R; http://www.cftc.gov/PressRoom/PressReleases/pr7668-18