U.S. Commodity Futures Trading Commission (CFTC) staff are warning companies to be wary of and actively counter risks from clearing digital asset transactions.
The CFTC's Division of Clearing and Risk sent out the advisory on Tuesday, saying it would put a special focus on the emerging risks in crypto in response to an upswing in its supervised entities clearing such trades. These risks include potential conflicts of interest, protections against cyber threats and how firms are managing physical delivery of digital assets in transactions requiring delivery.
The agency said it expects companies “to actively identify new, evolving, or uniquerisks and implement risk mitigation measures tailored to the risks.”
The derivatives regulator directly regulates crypto futures and has an enforcement reach into fraud and manipulation of spot markets for the trading of non-security crypto assets. It’s expected to have a wider future role as an industry watchdog, but bills that would enhance its authority haven’t yet moved through Congress.
When such a regulator issues a public warning about certain activities, it’s often followed later by sanctions in that arena. Meanwhile, the CFTC has already been pursuing major enforcement actions against crypto companies, including a recent action against Binance’s global operations.
Some crypto firms – including the former FTX.US subsidiary, LedgerX – have joined the ranks of derivatives clearing organizations overseen by the agency.