Key points to remember
- FTX released a paper suggesting regulatory changes that could produce more flexible options for trading.
- In particular, he suggests that spot exchanges and derivatives markets should be able to select a single lead regulator.
- FTX also recommends stricter regulations for stable coins.
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Crypto exchange FTX has published a document suggesting changes to US regulations that could provide greater flexibility. The document sets out ten principles.
FTX wants a primary regulator option
FTX weighed on cryptocurrency regulation, releasing a document earlier today that changes U.S. regulatory policy. Primarily, FTX suggests that exchanges should be able to select a single primary regulator.
“As many know, the CFTC is the primary regulator of commodity derivatives markets, while the SEC is the primary regulator of cash securities markets,” FTX notes. As some exchanges deal with both spot trading and derivatives trading, FTX suggests a framework that allows an exchange to “elect a market regulator as the lead regulator”.
This approach would undoubtedly be helpful to FTX itself, which operates both a spot exchange and a derivatives exchange.
Other FTX Principles cover topics such as custody of assets, risk assessment, client protection, KYC / AML and other common issues related to financial regulatory compliance.
Notably, one section focuses on the regulation of stablecoins, a topic FTX has previously commented on. The exchange wants regulators to keep a list of registered stable coins and ensure that these coins are regularly audited by an accounting firm.
Coinbase made a similar request
Competitor crypto exchange Coinbase released a similar document in October. He also recommended a unified approach to regulation; however, he suggested that the US government create a single regulator rather than allowing stock exchanges to elect one.
The news comes as the executives of FTX and Coinbase are due to testify before Congress next week. It remains to be seen whether the topic of regulatory reform will be discussed at this meeting.
FTX is currently the fifth largest crypto exchange, handling $ 4 billion in volume in the past 24 hours. Its derivatives exchange is the second largest, with $ 8 billion in open interest.
Disclosure: At the time of writing, the author of this article had less than $ 100 worth of BTC, ETH, and altcoins.
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