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Maloney’s Provision to Create Transparency For Digital Commodities in Derivatives Markets Passes Through Agriculture Committee

Oct 31, 2019
Press Release

Maloney’s Provision to Create Transparency For Digital Commodities in Derivatives Markets Passes Through Agriculture Committee 

Washington, D.C. – On Wednesday, Rep. Sean Patrick Maloney’s (NY-18) provision strengthening the Commodity Futures Trading Commission’s (CFTC) role in regulating digital commodities, like Bitcoin (or crypto-based derivatives) passed out of the Agriculture Committee. The provision, included in 2019 CFTC Reauthorization, will require the CFTC to create guidelines to grant access to trade data for digital commodities. The gathering of trade data is crucial to the CFTC’s ability to monitor the market and provide regulatory and enforcement oversight. This is the first piece of legislation related to the intersection of cryptocurrencies and the derivatives market to advance through a Congressional committee.

“It’s time for Congress to get smart about crypto and create an integrated approach to regulating digital currencies. This provision is an essential first step in our efforts to close the gap in regulation of crypto-assets in the derivatives market, fight manipulation, and detect fraud,” said Rep. Sean Patrick Maloney.

Background:

Maloney’s provision would expand the CFTC’s role in regulating crypto-based derivatives and fills the gaps in regulatory oversight of cryptocurrencies to avoid disruption or manipulation in the commodities markets. This is part of a greater effort to develop a broad integrated, interagency approach to regulating cryptocurrency.

The bipartisan 2019 CFTC Reauthorization improves system safeguards requirements for clearinghouses, trading platforms and swap data repositories; clarifies provisions for relief in the event of a broker bankruptcy; to strengthen the resiliency of financial market infrastructure; adds whistleblower protections for employees of organizations under CFTC jurisdiction; codifies no action letters that have been in the place making permanent relief for churches, university endowments, and other charitable organizations that use the markets to provide healthcare and retirement plans for their employees; enables further cooperation between the CFTC and international regulatory bodies; establishes an internship program to promote diversity in hiring; and authorizes the CFTC to make an honors program that will help them grow their own talent.

The bill will reauthorize the CFTC through 2025.

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