The US Commodity Futures Trading Commission (CFTC) retracted two crypto-related staff guidance on Friday, further streamlining its approach to crypto regulation.
The first recommendation was withdrawn on Friday at Staff Advisory No. 18-14. Advisory about cryptocurrency derivative products list. The advisory, originally published in May 2018, established guidelines for crypto-related derivatives, including establishing thresholds for large trader reports for five Bitcoin (or equivalent values for other cryptocurrency) that required reporting companies to maintain “close coordination with (The) CFTC Surveillance Group.” On Friday, the CFTC published a letter saying that “additional staff experiences” and “increasing market growth” made guidance unnecessary.
Second Advisory, Staff Advisory No. 23-07, Review of risks associated with expanding DCO clearing of digital assets“emphasizes (d) compliance” CFTC regulations from May 2023 due to “other operational risks that may be related to digital assets.” This guidance was withdrawn for another reason – to treat cryptographic derivatives and their publishers impartially and clearly, the CFTC suggests. In another letter Friday, the CFTC said it was withdrawing Staff Advisory No. 23-07 to ensure that the regulatory treatment of digital asset derivatives does not suggest that it is different from the treatment of other products.
The US Securities and Exchange Commission (SEC), the sister regulator of the CFTC, has rethinked its approach to cryptocurrency since President Donald Trump took office in January. Under the new leadership of acting chairman Mark Weda, the SEC has created a Cryptody Task Force that led its transformation, engaged with the industry, retreated from numerous lawsuits and retreated the investigation of crypto companies that began under the leadership of former chairman Gary Jensler.
While the rapid conversion of the SEC may be even more flashy, CFTC is currently undergoing its own conversion, streamlining its regulatory strategy as part of its agency’s plan “Back to Basics.” In addition to the two parts of the dropped crypto-related guidance, the agency pledges to withdraw other non-crypto-related staff advisories, overhaul the enforcement department, reduce the number of professional enforcement teams by just two, and simplified enforcement departments are more efficient and “stop enforcement regulations.”
Liz Davis, a partner at Washington, D.C.-based Davis Wright Tremain LLP and former chief trial attorney for the CFTC executive, told Coindesk he was looking at two parts of two decisive crypto guidance in line with Pham’s “Back to Basics” approach to running the agency.
However, Davis also suggested that changes could be linked to the larger ongoing restructuring at the CFTC.
“They are probably being reorganized with everything that is going on (the government efficiency (DOGE)),” Davis said, adding that Pham’s continued efforts to “centerize” the CFTC’s operations will help to promote the reorganization.
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