While the U.S. government determines its best approach to cryptocurrency regulation, a commissioner with the Commodity Futures Trading Commission (CFTC) is advising crypto companies to self-regulate. According to commissioner Brian Quintenz, firms in the crypto industry should think about adopting their own standards and best practices, Reuters reported.
Quintenz made his comments to reporters before the first meeting of CFTC’s Technology Advisory Committee in two years. That gathering comes as regulators are trying to balance the use of new tech like blockchain while making sure markets are fair and healthy for investors.
Through the committee, government officials and leaders in the private sector discuss matters such as the blockchain and digital coins. The CFTC, for its part, is looking forward to hearing their views.
“The role of the advisory committee is to advise us,” Quintenz said. “We can have a very candid and open discussion, and let the experts tell us what they think.”
The comments come after the CME Group and Cboe Global Markets received a green light from regulators to list their bitcoin futures in 2017, bringing more legitimacy to the cryptocurrency. According to a Financial Times report, the CFTC said the two would operate under a self-certification, with Cantor Exchange opting to self-certify bitcoin binary options as well. As a result, the futures exchanges have to be on the lookout for potential manipulation in the market and for big drops or outages.
What’s more, because the two exchanges have opted for self-certification, the CFTC only had a short period of time to review the products. The regulator could have rejected the product, but its approval wasn’t required.
The companies previously acknowledged they have to create a way to handle the swings in bitcoin’s value. CME, for instance, would require an initial margin of 35 percent from investors to back the trades. The regulators “were very adamant about the type of margin and risk controls” for the product, said Chris Concannon, president of Cboe.