Executives of two bitcoin futures exchanges defended their practices as not unduly risky to the Commodity Futures Committee as it considers tighter scrutiny of cryptocurrency derivatives.
Advocates argue for self-regulation
As reported by Forbes CboE Global Markets President and Chief Operating Officer Chris Concannon contended that before launching Bitcoin futures in December they had extensive contact with Commodity Futures Trading Commission (CFTC) staff, futures commission merchants, and other market participants.
Kathleen Cronin General Counsel for the CME Group argued CME’s rigorous efforts in developing its Bitcoin Futures.
“We are quite comfortable with the risk profile. It is no different from other contracts that have exhibited volatility”
These comments were made at a CFTC advisory group session convened to analyze the possibility of manipulating cryptocurrency futures and ensuring an adequate margin requirement.
CFTC chair Christopher Giancarlo has voiced his concern that exchanges bringing their cryptocurrency futures to market without formal CFTC approval may pose potential dangers to investors.
He went on to say that these potential dangers may need to be measured by the exchanges in conjunction with CFTC staff.
CFTC concerned over futures manipulation
Giancarlo’s fellow Republican Commissioner Brian Quintenz said self-certification is going along well for Bitcoin futures and that the introduction of new cryptocurrency derivatives should not be affected by the political considerations of its regulators.
Arguing for stricter controls Democratic Commissioner Rostin Behnam said that CFTC approval should be required because of the potential high risk of cryptocurrency products to investors.
Kari Larsen who acts as an attorney for multiple virtual currency futures exchanges called the derivatives an important measure for investors hedging risk since many virtual currencies are volatile.
The CFTC has taken up the mantle of regulating potential cryptocurrency manipulation while the Securities and Exchange Commision takes a back seat. Both Giancarlo and SEC Chairman Jay Clayton will be testifying on virtual currencies before the Senate Banking Committee Tuesday.
The debate over Bitcoin futures regulation will most likely continue on in America for some time while it seems like the way has been cleared in Japan with Tokyo Financial Exchange set to launch their Bitcoin futures products early this year.
Not surprising that Japan may lead the way for the cryptocurrency futures market as it is still one of the few countries to recognize Bitcoin as legal tender.