The Commodity Futures Trading Commission (CFTC) has recently provided guidance on offshore exchanges that serve US residents as part of the Frames of Trade Board of Trade (FBOT). According to Cohen, General Counsel at Real-World Asset (RWA) tokensization company Centrifuge, the settlement, clearing, and other regulatory requirements for traditional financial systems are not tailored to crypto exchanges and will be difficult or impossible to meet.
Cohen announced to CoinTelegraph that the CFTC guidelines have stipulated that only stock exchanges (Futures Commission) for Futures (FUCM), which are broker-dealers for futures contracts, and other highly regulated companies that are requested as part of the FBOT frame, can apply for the FBOT. He added: “The main problem is that only regulated exchanges outside the United States can apply for the FBOT. So you have to have an existing regulatory framework in your home country.”
CFTC employees have described qualified criteria in order to register as part of the FBOT frameworks and to use US residents. Source: CFTC. Many exchanges choose to set up companies on Seychelles or other non-regulated jurisdictions in order to avoid such a framework at all, added Cohen.
CFTC’s Regulatory Framework for Crypto Exchanges
The best way to clarify the crypto exchange is to adopt a draft law on the crypto market structure in Congress, to codify the crypto regulations into laws, and to create permanent changes that do not shift from administration, said Cohen. This would provide much-needed clarity and stability for the crypto industry.
However, the CFTC’s “Crypto Sprint” initiative aims to revise the crypto regulations in order to fulfill the US President’s agenda to make the USA a global leader in crypto. The initiative promises to provide clarity about regulations and a revision of the financial system.
Risks and Challenges in the Crypto Market
Johnson from CFTC warns of the risks of the predictive market, stating that there are “too few guardrails” in place to protect investors. The CFTC’s crypto report proposes several political recommendations, including the granting of Securities and Exchange Commission (SEC) and CFTC supervision of crypto.
Both supervisory authorities have proposed several efforts to cooperate, including the potential that financial markets become eternal, which creates a 24/7 trade cycle in the financial classes. The proposed change would be a significant departure from the Legacy Financial Markets, which are currently not closed in nights or weekends and on certain holidays.
Future of Crypto Regulation
The crypto industry is awaiting further clarification on the regulatory framework, and the CFTC’s “Crypto Sprint” initiative is a step in the right direction. However, more needs to be done to provide a clear and stable regulatory environment for crypto exchanges and investors.
For more information on the CFTC’s guidance on offshore exchanges and the future of crypto regulation, visit https://cointelegraph.com/news/fbot-won-t-bring-offshore-crypto-exchanges-us?utm_source=rss_feed&utm_medium=rss_tag_regulation&utm_campaign=rss_partner_inbound
