The U.S. Commodity Futures Trading Commission (CFTC) issued a formal decision this week that its employees are allowed to trade cryptocurrencies. Bloomberg reports that decision resulted from numerous inquiries from CFTC personnel asking whether or not they were allowed to own such digital assets. The answer was yes: the government employees who regulate bitcoin futures are also allowed to own bitcoin.
This green light sees the CFTC joining the SEC as a crypto-friendly financial regulator, but just because two of the big dogs do it doesn’t mean everyone thinks it’s O.K. The critique—and there is always critique—is that allowing the individuals who make up these regulatory agencies to hold cryptocurrency will affect the decisions they make in the line of their work. Would someone issue reports designed to inflate their own portfolio, for example? In any event, the decision was made and permission was granted.
The CFTC issued ethics guidelines to go along with it, stating that the rules for trading cryptocurrencies are a lot like the rules for trading any other commodity. Employees can’t buy them on margin and can’t use insider information they got at work to make advantageous trades. The CFTC recognizes cryptocurrency as a conventional commodity in line with the Commodity Exchange Act.
CFTC chairman Christopher Giancarlo said regulators cannot ignore cryptocurrencies because “they are sweeping us rapidly, day-by-day, hourly, into a new future,” and that future is going to bring new challenges with it. It behooves our regulators to have full experience with a new kind of normal that makes tomorrow’s regulatory challenges seem more manageable by comparison. Regulators have to be hip to crypto now.
In other words, it’s decreasingly niche and nerdy to be trading cryptocurrency. More and more of the financial old school recognizes it as valid, valuable, legit, and here to stay.
This is what mainstreaming looks like.
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December 17, 2019
