Chairmen from the SEC and CFTC talk crypto regulation at ISDA meeting

Chairmen from the SEC and CFTC talk crypto regulation at ISDA meeting



The annual meeting of the International Swaps and Derivatives Association (ISDA) started Wednesday in Madrid. United States Securities and Exchange Commission (SEC) chairman Gary Gensler and U.S. Commodity Futures Trading Commission (CFTC) chairman Rostin Behnam had been each featured as keynote audio system at the occasion, with Behnam talking at the morning session, and Gensler in the afternoon.  

Behnam spoke at size about “a request for an amended order of registration as a derivatives clearing organization (DCO) by an entity seeking to offer non-intermediated clearing of margined products to retail participants,” which was transparently a reference to FTX US’s request.

“As other registered entities have expressed interest in exploring similar models, and given the potential impact on clearing members and FCMs [futures commission merchants]” [
] it’s paramount to be clear and present a chance to listen to from the public,” Behnam mentioned, plugging the CFTC roundtable on the topic developing later this month.

FTX CEO Sam Bankman-Fried might have been listening as Behnam spoke, as Bankman-Fried was current at the convention and participated in a hearth chat a number of hours later.

Behnam went on to recall his February Senate testimony and say that:

“I will continue advocating for and supporting legislative authority for the CFTC to develop a regulatory framework for the cash digital asset commodity market.”

Currently, the CFTC solely regulates derivatives markets, though it has exerted enforcement authority over money markets, akin to the high-quality it imposed on Coinbase for improper reporting of change quantity and “self-trading” in 2021.

Related story: Bipartisan invoice to offer CFTC authority over exchanges and stablecoins

Gensler spoke about “the intersection of crypto assets with derivatives” in his considerably shorter speech. He mentioned:

“If platforms — whether in the decentralized or centralized finance space — offer security-based swaps, they are implicated by the securities laws and must work within our securities regime.”

Gensler confused the want for the ISDA “to recognize that if the underlying asset is a security, the derivative must comply with securities regulations” because it develops authorized requirements for crypto derivatives.



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