FTX.US Proposal for Direct Clearing to Be Considered by CFTC



The United States Commodity Futures Trading Commission (CFTC) will hold a roundtable discussion to consider a proposal from FTX.US to directly clear the trades of its derivatives customers.

FTX.US has made a proposal to say that futures commission merchants should be removed from the learning process. The Chicago Mercantile Exchange (CME) has decided to oppose the exchange’s proposal.

Chairman and chief executive of CME Group Terry Duffy announced the objection during the CME‘s Q1 financial results call. He said that if there is any change in market structure, the CME should not be left out of participating in the changes. 

“The CFTC has to look at new products but you cannot have innovation for the sake of innovation. Innovation has still got to be under the principles-based regulatory regime that is highly outlined by the CFTC today so it will be fascinating to see how this plays out,” he said.

FTX.US seeking 24/7 trading

His view is that changes should not be made without considering how they would affect the economy in general. The FTX application asks that it can trade in the derivatives market 24/7, without requiring an intermediary to make clearances.

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“Recently, however, a number of registered entities have discussed with CFTC staff proposals to offer ‘non-intermediated’ or direct trading and clearing of margined products to retail customers,” the CFTC notice reads.

The CFTC is one of a number of U.S. agencies with its sights on the crypto market. Others include the Securities and Exchanges Commission (SEC) and the U.S. Treasury. 

Changes are incoming for the crypto market. To what degree and what exactly these authorities will change remains to be seen, but they have revealed that investor protection and anti-money laundering (AML) and Know Your Customer (KYC) compliance have been their top priorities.

Meanwhile, crypto investment companies are pushing for more friendly regulations. Grayscale has filed a spot bitcoin ETF and is asking the public to support its approval. It has even suggested that a lawsuit may be on the horizon should it be rejected.

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