A commissioner of the United States Commodity Futures Trading Commission (CFTC) has confirmed that the agency is “working hard” on cryptocurrency-related applications including the one received from institutional trading platform Bakkt.
During an interview with cryptocurrency news outlet Blocktv on Tuesday, March 19, Commissioner Dan Berkovitz explained that the CFTC is reviewing applications for bitcoin futures as well other crypto-related products.
“We have a very interactive process with all the entities that come before us and [are] working diligently with all the applicants to process their applications and get their products on the market…But we need to ensure that a crypto product, just like any other product that’s traded on our markets, meets all the standards.”
However, Berkovitz did not give any specifics of the various applications the government regulators are considering. He did not also give a rundown of the events or timeline for approvals. Instead, he said in a general sense that the CFTC was trying to assist all such products to obtain approval for their launch.
CFTC’s Role in Bakkt’s Delays
Bakkt is a subsidiary of Intercontinental Exchange (ICE), the parent organization of the New York Stock Exchange. As Smartereum reported, Bakkt announced plans to launch a Bitcoin futures custody and trading platform last year. But since the announcement, the actual launch of the platform has been delayed at least twice. Observers have linked the delays to the CTFC not giving the ICE the needed licenses to carry on.
The Bakkt application has undergone the mandatory 30-day comments period has not received a final decision from the CTFC. When asked specifically is the regulators were prioritizing the Bakkt application following the hold-ups, Berkovitz replied:
“All of the applications before us we’re working very hard on with the applicants, including that one.”
CFTC approved the first bitcoin futures contracts for CBOE and CME in 2017. Those futures differ from Bakkt because they are not physically settled—that is the value of the bitcoin is settled with U.S. dollars and not the actual bitcoins. Bakkt, on the other hand, involves the actual custody of bitcoin and any other cryptocurrency.
A recent report by the Wall Street Journal claims Bakkt is facing difficulties in its quest to get approved. The report suggested that the way Bakkt will handle its physically-settled Bitcoin futures was a concern for the CFTC. An unnamed source form the ICE told WSJ:
“We are working through the regulatory review process and are looking forward to updating the market soon.”
Former CFTC Chair Propose Advanced Cryptocurrency Regulation
Timothy G. Massad, the Chairman of the United States Commodities and Futures Trading Commission (CFTC) during the Obama administration says the current efforts of the CFTC and Securities and Exchange Commission (SEC) is not enough. In an independent report, Massad called for a new approach that will fix the gap that “is contributing to fraud and weak investor protection in the distribution and trading of crypto-assets.”
He noted that the CFTC has limited jurisdiction particularly in the buying and selling of actual Bitcoin. He then called for new regulations to bridge this gap but argued against the creation of a new agency.
ErisX, a newly launched cryptocurrency exchange with the backing of Wall Street firms is also adding to CFTC’s plate. The exchange is hoping to launch the first regulated US-based futures market for Ethereum and other cryptocurrencies like Litecoin. As Smartereum reported, ErisX wrote to the commission making a case for the introduction of Ethereum futures.