In order to have a better enforcement and surveillance of cryptocurrency products, the Commodity Futures Trading Commission will have to spend more on technology, says CFTC Chairman Chris Giancarlo.
According to the CFTC’s interpretation, the term “virtual currency” incorporates any digital representation of value that functions as a medium of exchange, as well as any other digital unit of account that acts as a form of currency regardless of its format (tokens, coins, or digital units distributed through smart contacts).
The Commission, however, emphasizes that this “definition” should not be taken as definitive, nor arbitrary. As of September 2015, the CFTC maintains that
“Bitcoin and other virtual currencies are encompassed in the definition and properly defined as commodities, and are therefore subject as a commodity to applicable provisions of the Act [CEA] and Regulations.”
Giancarlo said the CFTC and other financial regulators are working together to aggressively prosecute cryptocurrency bad actors. He said he didn’t know when the federal cryptocurrency task force led by the Treasury Department will issue a report.
Giancarlo promoted a bill by Ag Committee member Georgia Representative Austin Scott that would let the CFTC collaborate with fintech developers on projects including acting as a regulatory node on a blockchain. However, the dwindling days Congress is in session this election year bodes poorly for most bills. This one was introduced in June.
The commissioner says he is going to lay out six guiding elements for the CFTC on crypto products, namely, strong enforcement, staff competency, consumer education, Interagency cooperation, Exercise of authority, and Heightened review of virtual currency product self-certifications.
The prevailing attitude of the CFCT towards cryptocurrencies and DLT, in general, is exceptionally positive. Several commissioners have expressed their great admiration for blockchain technology and their beliefs in the DLT’s power to revolutionize the financial world. Their actions towards crypto exchanges and other enforcement interventions on the market are adding much-needed security to the crypto industry.