CFTC Employees Permitted to Trade Bitcoin and Cryptocurrencies
It has been reported that the leading commodities regulator in the United States, the Commodity Futures Trading Commission (CFTC), has provided clarity on whether their workers can engage in cryptocurrency investing, a net positive for the crypto market. The CFTC is also responsible for the regulation of the bitcoin futures market.
The CFTC has altered their ethics guidance principles to now allow employees to partake in the trading of cryptocurrencies once they don’t use margin to purchase them or utilize inside information they have obtained as a result of their occupation with the CFTC.
Employees are still not allowed to make bitcoin futures-related investments as this would be a conflict of interest.
What has been the Reaction to this Change?
It is believed that this change will go down well with the CFTC employees. The general counsel for the agency Danil Davis noted in a memo sent at the beginning of February to workers that these ethics guidelines have been changed after the ethics office were sent “numerous inquiries” as to whether or not employees were allowed trade cryptocurrencies.
This move has been made at a moment in time when a lot of federal agencies have been debating what sort of rules and regulations should be placed upon this rapidly growing market of digital currencies.
A lot of people in government are concerned about the significant levels of volatility in these markets, the instances where hacks and fraud have occurred and the use of digital currencies to help protect criminal activities.
In other quarters, this decision by the CFTC is seen as a misguided one, with one associate professor in digital money and financial stability calling this move “mind-boggling.”
There are concerns that this move could affect on future regulatory decisions. Even the chairman of the CFTC J. Christopher Giancarlo does not want employees trading digital currencies as he believes that this presents a conflict of interest.
CFTC and their Role with Cryptocurrencies
The CFTC have been one of the few government agencies that have been somewhat bullish about digital currencies for a number of years. It was in 2014 that they declared that cryptocurrencies are a commodity that is subject to their oversight.
The majority of this oversight in the intervening years has been to do with stopping alleged frauds. However, the bulk of crypto trading takes place on exchanges that are subject to little or no regulations or in other nations where the commission has no jurisdiction.
The end of 2017 did see this change somewhat as the CFTC gave the go-ahead to two significant US exchanges that they could begin to offer bitcoin futures, something which has placed the CFTC is a prominent position in the crypto oversight world.
When this move was announced, the price of bitcoin rose 13 percent in a single day which showcases what sort of effect regulatory decisions may have on the markets. The regulator’s bearing on markets is precisely why many are calling for the CFTC to focus on oversight rather than allowing employees to speculate on the cryptocurrency.