The U.S. Commodity Futures Trading Commission (CFTC) has withdrawn two pieces of crypto-related staff guidance in order to streamline its approach to crypto regulation.
The first advisory, Staff Advisory No. 18-14, was originally published in May 2018 and provided guidelines for crypto-related derivatives. It required reporting firms to maintain close coordination with the CFTC surveillance group and set a large trader reporting threshold of five bitcoins. The CFTC stated that the guidance was no longer necessary due to additional staff experience and increasing market growth.
The second advisory, Staff Advisory No. 23-07, emphasized compliance with CFTC regulations regarding the expansion of DCO clearing of digital assets. This guidance was withdrawn to ensure fair treatment of crypto-related derivatives and their issuers. The CFTC clarified that its regulatory treatment of digital asset derivatives will not vary from its treatment of other products.
While the SEC has made significant changes to its approach to crypto regulation, the CFTC is also streamlining its regulatory strategy under Acting Chair Caroline Pham. This includes rescinding other non-crypto-related staff advisories and overhauling its enforcement division to be more efficient and focused.
According to Liz Davis, a partner at Davis Wright Tremaine LLP and former chief trial attorney in the CFTC’s Division of Enforcement, the rescinded crypto guidance aligns with Pham’s approach to running the agency. Davis also suggests that the changes may be part of a larger restructuring at the CFTC, possibly related to ongoing efforts to centralize operations within the agency.
