Statements suggesting a new era in regulatory approaches to cryptocurrency markets in the US have emerged. On Monday, Michael Selig, Chairman of the US Commodity Futures Trading Commission (CFTC), stated that the country has become the "crypto capital of the world." Selig's speech revealed that a comprehensive regulatory framework aimed at bringing clearer rules to digital asset markets is in the preparation stage.
Speaking at the annual industry conference of the US Futures Association (FIA), Selig emphasized that crypto assets are becoming an increasingly important part of the financial system. According to him, blockchain technologies, smart contracts, and digital assets are not only creating a new investment class but also reshaping financial processes such as the trading, exchange, and collateralization of commodity price risk.
Selig stated that financial markets are becoming increasingly digital, and this transformation is bringing about a new wave of innovation. He noted that AI-powered trading systems can execute orders at speeds and volumes far beyond human capacity, and that these technological advancements are leading to fundamental changes in financial markets.
New Classification System for Crypto Assets Underway
The CFTC Chairman announced that the institution is working on a new crypto asset classification system to create a clearer regulatory framework for crypto markets. This classification aims to more clearly determine which regulatory body's jurisdiction products in the market fall under.
Thanks to the prepared taxonomy, it will be clearer whether a crypto asset falls under the supervision of the CFTC or the US Securities and Exchange Commission (SEC). It is also stated that some assets may fall under the joint jurisdiction of both institutions.
According to Selig, such a harmonization initiative could eliminate a significant uncertainty for entrepreneurs and companies operating in the crypto sector. The creation of clearer rules is seen as an important step that could encourage the sector's growth within the US.
“Project Crypto” Initiative Launched
Selig also announced a new initiative aimed at ending the long-standing jurisdictional disputes between the CFTC and the SEC. This work, called the “Project Crypto Initiative,” aims to increase coordination between the two institutions and develop a common regulatory framework. This initiative aims to create more consistent and predictable regulations for the crypto asset market. Selig stated that past disagreements between institutions created uncertainty in the sector, but that cooperation will be increased in the new era.
A guide will be prepared for DeFi developers
Another issue highlighted by the CFTC Chairman was decentralized finance (DeFi) applications and software developers. Selig announced that he instructed CFTC personnel to prepare a special guide for developers of software systems that do not offer custody services.
This will clarify under what circumstances software developers who develop digital wallets or DeFi applications need to register with an intermediary institution. This step aims to resolve a significant legal uncertainty that has long been debated in the crypto sector.
Leveraged transactions and crypto perpetual contracts are being examined
According to Selig's statements, the CFTC is also re-evaluating the rules regarding leveraged crypto transactions for individual investors. The institution plans to create clearer standards on when the "actual delivery" exception can be applied. In addition, the classification of perpetual futures contracts, which are quite popular in crypto markets, is also on the agenda. The CFTC has begun examining how these products will be regulated within the framework of existing commodity derivatives.
New regulations are also on the agenda for prediction markets
Selig also touched upon prediction markets in his speech. Stating that the CFTC will use its authority in this area more strongly, Selig said that a new guide will be prepared on how event contracts will be listed and traded.
It was also stated that the institution will initiate a new regulatory process to obtain opinions from industry stakeholders on issues affecting prediction markets.
According to Selig, the combination of blockchain technology with prediction markets can create a new trust mechanism against misinformation and disinformation. Therefore, the institution considers this area as one of the future financial innovations.
