FTX exchange releases document on crypto regulation before US Congress hearings

Sun 05 Dec 2021 ▪ 13h44 ▪ 3 min read — by Susan McCormack

FTX crypto exchange has published a document that should help US politicians build a framework for regulating cryptocurrencies. The list of proposals consists of 10 items.

“FTX’s Key Principles for Market Regulation”

FTX shared an article on their blog titled “FTX’s Key Principles for Market Regulation”. The publication came after Maxine Waters, the House Committee on Financial Services Chair, invited the CEOs of large crypto companies to talk about digital assets and the future of finance.

Of the 10 key principles presented, one of the recommendations calls for an alternative approach to regulation, namely a single control regime for spot and derivative markets. The company assumes that exchanges should be able to choose one main regulator.

“As many know, the CFTC is the primary regulator of commodity derivatives marketplaces, while the SEC is the primary regulator of cash securities marketplaces, and the two agencies share oversight responsibility for certain aspects of security derivatives marketplaces,” FTX marks.

The exchange has explained the need to establish a market structure that would allow organisations to conduct regulated transactions without intermediaries, as well as the need to establish a framework for reporting transactional activity in order to avoid market manipulation and ensure customer protection.

One of the sections is devoted to stablecoin regulation. The exchange wants regulators to keep a list of registered stablecoins and ensure that accountants regularly check them.

Previous proposals

Coinbase released a similar document in October. It also recommended a unified approach to regulation, however, suggested that the US government create a single regulator, rather than allow exchanges to choose it themselves.

The head of Coinbase has also proposed to create a self-regulatory organisation that will work in conjunction with the regulator to create rules for the market.

A sitting in the US House of Representatives on the topic “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States” is scheduled on 9th December. In November, Congressman Glenn Thompson presented a revised draft of the Digital Commodities Exchange Act (DCEA), which attempts to build on the existing commodity markets’ regulatory framework “to bring certainty to developers, intermediaries, and customers in the digital asset marketplace by establishing clearly defined rules.”

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Susan McCormack

How many crypto nerds does it take to fork an altcoin? I may be a failed comedian, but crypto is no joke! I want to share my knowledge and help others to see the bright future ahead. #buybitcoin

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The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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