Today, the Division of Clearing and Risk (DCR) of the Commodity Futures Trading Commission (CFTC or Commission) issued a Staff Advisory on Review of Risks Associated with Expansion of DCO Clearing of Digital Assets (Staff Advisory). The Staff Advisory acknowledges the introduction of innovative changes including novel financial products and platforms and new market participants operating in our regulated markets in recent years. The Staff Advisory further acknowledges that careful evaluation may reveal heightened risks associated with certain clearing activities, particularly clearing activities in digital assets or cryptocurrency markets.
Begin A Rulemaking Process
While I support the Staff Advisory, the rationale for such a notice indicates the increasingly urgent need for the Commission to initiate a formal rulemaking process that invites a comprehensive evaluation of “heightened” risks associated with certain crypto clearing activities, ensures parallel customer protections apply across our markets for similar clearing activities, and proposes appropriate measures to mitigate unique as well as traditional risks. Specifically, proposed rules should address:
