New CFTC Statement on Cryptocurrencies

On January 4th, 2018, the Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo issued a statement on virtual currencies.

The Commissioner points out the risks of virtual currencies :

• Early stage technology itself
• Operational risks of unregulated and unsupervised trading platforms
• Cybersecurity risks of hackable trading platforms and virtual currency wallets
• Speculative risks of extremely volatile price moves
• Fraud and manipulation risks through traditional market abuses of pump and dump schemes, insider trading, false disclosure, Ponzi schemes and other forms of investor fraud and market manipulation

"One thing is certain: ignoring virtual currency trading will not make it go away. Nor is it a responsible regulatory strategy. " The commissionner announced a meeting on January 31, 2018  to consider the process of self-certification of new products and operational rules by Designated Contract Markets (DCMs) under the Commodity Exchange Act (CEA) and CFTC regulations.

The CFTC has declared virtual currencies to be a commodity. Since 2014, the CFTC has taken action against various derivatives operations. On October 17, 2017, LabCFTC , the branch of the Commodity Futures Trading Commission promoting responsible Fintech Innovation, issued in October a primer on virtual currencies.