CFTC Recommends Updated Guidelines for Managing Crypto Market Volatility

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The U.S. Commodity Futures Trading Commission (CFTC) has recommended updating its guidelines for risk management. According to Commissioner Christy Goldsmith Romero, the modifications should require businesses to take precautions against the volatility of the cryptocurrency market and the risks associated with retaining clients’ digital assets. A proposal from the CFTC asking for feedback on potential adjustments to the agency’s risk management programme was released on Thursday. Romero also called attention to the ongoing problems with the industry’s custody procedures, saying that “brokers may explore holding customer property in the form of stablecoins or other digital assets that could result in unknown and unique risks.” The CFTC will accept public feedback on its “advance notice of proposed rulemaking” for 60 days. This is the first phase of the rule-making process, which must be followed by a formal, proposed rule and a vote on the final version.

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On June 5, Coinbase’s derivatives exchange, which is governed by the Commodity Futures Trading Commission, will launch futures contracts for Bitcoin BTC and Ether ETH. These contracts are designed to help clients manage market exposure effectively and will have a fixed amount of 1 Bitcoin and 10 Ether. Coinbase also disclosed its strategic decision to open a derivatives exchange in Bermuda, which would let traders use perpetual futures contracts with leverage of up to 5x to speculate on the values of Bitcoin and Ethereum.The U.S. Securities and Exchange Commission (SEC) responded to Coinbase’s request for a writ of mandamus by communicating that the regulation process may take many years and that it is not under any time restrictions to complete the process quickly. The SEC emphasised that the public remarks made by its head Gary Gensler should not be taken as formal instructions or declarations of the commission’s official stance.

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