Regulatory Series on Cryptocurrencies: US Congress' Crypto-Derivatives Legislation To Define CFTC's Authority

Following the US Congressional grilling Mark Zuckerberg over Facebook’s Libra objectives and their mechanism in the recent past, a legislator, Tom Emmer, has drawn a stance towards introducing a new U.S. crypto bill that could provide token sales legal protection from SEC enforcement actions.

But for now, the U.S. Congress is due for the floor voting on a bill instructing with the latest clarity about the Commodity Futures Trading Commission’s (CFTC) authority over the cryptocurrency derivatives markets within its regulatory purview.

While on the flip side, the Congress also passes the laws against threats including ‘Decentralized Cryptocurrencies’.

As per the provision provided in the 2019 CFTC Reauthorization Act , it clarifies as to how the regulator is obliged to collate information on digital commodities contracts and commodity swaps. 

The bill is now due for the floor vote as the house of representatives of Agriculture Committee who oversees the CFTC, passed it unanimously. Upon a successful acceptance, the bill is most likely to be the first Congressionally-mandated, digital commodity-specific requirements on the CFTC.

CoinDesk reports that CFTC Chairman Heath Tarbert said he commended the Agriculture Committee on passing bipartisan legislation. “The sound regulation of our derivatives markets, which see more than $4 trillion in notional activity each day, is critical to the health of the U.S. economy and the pocketbook of every American,” he said, by adding further, “I look forward to working with members of both parties in both chambers to see a bill through to completion.”

The Division of Market Oversight (DMO) fosters open, transparent, fair, competitive and secure markets through oversight of derivatives platforms and swap data repositories. DMO reviews new applications for designated contract markets, swap execution facilities, swap data repositories and foreign boards of trade and examines existing trading platforms and swap data repositories to ensure their compliance with the applicable core principles and other regulatory requirements, including system safeguards.