The U.S. Commodity Futures Trading Commission (CFTC) has withdrawn two guidances on crypto derivatives in an effort to simplify the industry's regulation.
Reasons for Withdrawing Guidances
CFTC decided to withdraw the two guidances due to significant growth in the crypto market, rendering the old rules obsolete. The aim is to ensure that crypto derivatives are treated fairly like other financial products.
Details of Withdrawn Guidances
The first guidance, published in May 2018, outlined handling requirements for crypto derivatives and set a reporting threshold for large market participants. The second guidance, released in May 2023, focused on digital asset risks and the necessity of following CFTC rules.
Operational Changes within CFTC
Under Acting Chair Caroline Pham, CFTC is restructuring to improve efficiency, reducing specialized teams in its enforcement division and halting 'regulation by enforcement' practices.
The withdrawal of the guidances and internal changes within CFTC demonstrate the agency's commitment to simplifying regulation and increasing operational efficiency amid the growing crypto sector.
