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FTX Shares 10-Point Regulatory Proposals to American Congress

Godfrey Benjamin   Dec 06, 2021 03:20 2 Min Read


One of the world’s biggest cryptocurrency trading platforms, FTX Derivatives Exchange, has published a 10-point regulatory proposal aimed at helping American regulators to provide better regulatory oversight of the broader cryptocurrency ecosystem.

Contained in a Blog post dubbed “FTX’s Key Principles for Market Regulation,” the trading platform recommended that all aspects of the market, either spot or derivatives, should be brought under a single regulatory regime.

“In jurisdictions where there are two mature market regulators, FTX proposes the permissibility and adoption of a reasonable and rigorous framework that would allow a crypto-markets platform operator to elect one market regulator as its primary regulator for a unified spot and derivatives trading book, subject to adherence to a cooperative framework in which the other market regulator acts a secondary regulator while maintaining appropriate visibility into the platform’s operations, but not day-to-day supervisory responsibilities,” the proposal reads.

In the United States, there has been a significant confluence of regulatory showdowns between the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC). Under the FTX proposal, either one or a newly appointed body will be responsible for taking over the regulations of the fast-growing digital ecosystem.

FTX also proposes a direct membership market structure, a model that will allow entities to perform regulated trades without the involvement of a third party. The trading platform wants oversight on asset custody, which will breed increased transparency amongst exchanges and their customers.

Rules on stablecoins issuers should require issuers to determine the standards they employ in permitting some coins over others, and these standards should be communicated to the public. FTX also proposes adequate reporting standards from cryptocurrency platforms to meet required regulatory provisions.

The set of proposals came ahead of the planned December 8 hearing wherein Chief Executive Officers of trading platforms will be made to testify before the House Committee on Finance as confirmed by the Committee Chairman, Maxine Waters.

The demand for clear regulations in the US has long been on the call. With the moves currently being championed by the regulators, a clear functional oversight will allegedly reposition the United States as the cradle of financial innovation in comparison to other global economies.


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