Bitcoin
$39,419.55+1.46%
Ethereum
$2,160.04+3.21%
Binance Coin
$225.80-0.43%
XRP
$0.61968742+1.08%
Solana
$62.82+4.41%
Cardano
$0.39493237+2.89%
Dogecoin
$0.08574756+2.22%
Tron
$0.11057311+0.98%
Chainlink
$15.99+6.87%
Toncoin
$2.44-1.41%
Avalanche
$22.06+0.76%
Polygon
$0.81614588+2.32%
PlayIconNav
Crypto Prices CoinDesk Market Index CoinDesk Market Index
Markets

CFTC Issues Guidance on Digital Currencies for Futures Commission Merchants

The CFTC wants futures commission merchants to take care when dealing with customer's funds.

By Sebastian Sinclair
AccessTimeIconOct 22, 2020 at 2:01 a.m. UTC
Updated Sep 14, 2021 at 10:22 a.m. UTC
CFTC Chairman Heath Tarbert, right, speaks to CoinDesk Chief Content Officer Michael Casey at Invest:NYC 2019.

CFTC Chairman Heath Tarbert, right, speaks to CoinDesk Chief Content Officer Michael Casey at Invest:NYC 2019.

10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The Commodity Futures Trading Commission (CFTC) has released an advisory to futures commission merchants (FCM) providing clarity on how to look after users' digital currencies in segregated accounts.

  • According to a Wednesday press release from the CFTC's Division of Swap Dealer and Intermediary Oversight, the advisory informs FCMs on how to hold and report certain digital assets held by customers in connection with physically delivered futures contracts or swaps.
  • A segregated account means customer funds are strictly separated from a company's money.
  • The CFTC noted that holding customer assets as segregated funds may let greater risks arise for the other customers under the same banner.
  • The financial watchdog's advisory also provides guidance on best practices FCMs should follow when they design and maintain risk management programs when dealing with digital assets as customer funds.
  • The advisory does not pertain to foreign FCMs' digital assets custody of customer's assets in relation to trading futures or options on futures.
  • CFTC Division Director Joshua B. Sterling said in a statement the commission is "committed to fostering responsible fintech innovation" as it works toward creating a "holistic framework for digital asset derivatives."

See also: Tassat Gains CFTC ‘No-Action’ Relief Ahead of Eventual Bitcoin Swaps Contract Listing

See the CFTC's guidance in full below:

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.

Read more about
CFTCMerchantsCoinFlash