U.S. regulators warned companies on Tuesday of the risks associated with liquidating digital assets.
The U.S. Commodity Futures Trading Commission Recommendation The title is “Examination of the risks associated with the expansion of DCO clearing of digital assets”.
Derivatives Clearing Organizations (DCOs) are registered with the CFTC and provide clearing services for products such as futures contracts, options and swaps.
The regulator said it “observed increased interest from DCOs and DCO applicants in expanding the range of services offered by DCOs, including the types of products and lines of business that are cleared, clearing models, and related to digital assets.”
The agency specifically points out risks, including cyber, that may be associated with digital assets.
Regarding DCOs involving the “physical delivery of digital assets,” the regulator said its staff “whether the DCO adequately identifies and manages the risks and obligations associated with digital assets, and whether the DCO rules clearly define those obligations.” We will focus on reviewing physical payment arrangements, such as whether they are listed in the For physical deliveries containing digital assets, he is responsible for the DCO, if any. ”
DCO and digital assets
The CFTC granted LedgerX a DCO license in 2017, which allows it to clear futures, options on futures and swaps.
FTX US acquired LedgerX in 2021, but sold it to an affiliate of Miami International Holdings in April after LedgerX’s demise.
According to court filings, FTX CEO John J. Ray III said that LedgerX operated “on a largely independent basis” from FTX.
“My understanding is that LedgerX maintains not only its own books and records, but also segregated customer accounts in accordance with applicable CFTC regulations,” Ray said.
Separately, the CFTC is also actively pursuing companies and individuals in the cryptocurrency industry that it believes violate rules.
Regulatory authority Paid Crypto exchange Binance and its founder Zhao Changpeng fought in March over offering unregistered crypto derivatives trading products in the United States.