Breaking: CFTC Urges Bitcoin Exchanges Surveillance to Prevent Futures Manipulation



Rather than tinkering with fundamental concepts in bitcoin use, this regulation would presumably be aimed at making sure that people can buy or sell bitcoins without being ripped off.

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According to available reports, the CFTC will likely vote on the matter in early A critical element to price discovery is physical delivery. Specifically, with our solution, the buying and selling of Bitcoin is fully collateralized or pre-funded. As such, our new daily Bitcoin contract will not be traded on margin, use leverage, or serve to create a paper claim on a real asset.

Apart from Bakkt, Nasdaq has also confirmed that it wants to launch its Bitcoin futures product in and possibly other altcoins like Ethereum thereafter. Share your thoughts below! I consent to my submitted data being collected and stored. Georgi Georgiev Jan 11, Emilio Janus Jan 10, Allen Scott Jan 09, Osato Avan-Nomayo Jan 09, Osato Avan-Nomayo Jan 08, So the heaviest CFTC regulation of bitcoin would likely concern not the cryptocurrency itself, but derivative bitcoin hedging contracts.

Issuers involved with bitcoin futures might have to register with the CFTC and consequently jump though a number of regulatory hoops. In truth, that future is already partly here: In fact, if Commissioner Wetjen is right that bitcoin actually is a commodity, then people who manipulate its markets can even be sent to jail. What constitutes market manipulation? Generally, though, market manipulation usually involves making fraudulent or deceptive trades aimed at moving a commodity price away from its true value.

Soon, others think that the market price for the commodity has genuinely risen, and the manipulator then sells his holdings to others at that higher artificial price. The potential for fraud in the bitcoin markets only hurts uptake and investment. Some might conclude, then, that it might not be such a bad thing if the CFTC does deem bitcoin trading to fall under its jurisdiction. Under this view, policing market manipulation is not the kind of full-fledged, invasive regulation that many fear squelches innovation.

Instead, the function that the CFTC would serve would be to watch, investigate when things look fishy, and hopefully weed out fraud.