CFTC Wants U.S. to Lead In Digital Asset Innovation

October 20, 2020 09:53 AM
Crytpo and Bitcoin Market Cap Story of Day

Crytpo and Bitcoin Market Cap Story of Day





The crypto Top 10 is on balance weaker this morning, except for BTC, which has continued its rise towards USD 12,000. Spot volumes remain in line with what we have seen over the last two weeks.

Crypto Story of the Day

Last week, in an address, we believe CFTC Chairman Heath Tarbert implied the U.S. government would continue to prosecute offshore crypto derivative platforms. this continues to have implications for crypto market structure and general fragmentation.

The CFTC Chairman, who has now been in his role for about a year, spoke at the Ethereum: Invest Conference hosted by CoinDesk. Topics focused on developing DeFi and Ethereum's regulatory status and delved into CFTC intention against offshore derivative platforms considering the news of the day actions taken against BitMEX.

Tarbert has made it very clear that he wants the U.S. to 'lead in digital asset innovation' and that regulating the asset class is somewhat of a legacy item. He elaborated to say, 'what we don't want to see are offshore exchanges that are effectively flouting US laws.' Furthermore, U.S. regulators have an 'obligation' to shutdown these 'non-compliant' platforms.  Despite the comments, Tarbert, of course, would not outright confirm the CFTC was pursuing other trading venues.

Last week, we pointed out the DOJ's comments and broad government support for an offshore crypto crackdown; we cannot help notice that such discussion has accelerated since Tarbert was named Chair at the CFTC. While the Chairman's interest in crypto was seen as an outright positive initially, it seems now there will be clear winners and losers among space incumbents with his perspective.

Tarbert further appears to have implied that proving jurisdiction is not a major concern. He simply labels his targets 'offshore exchanges', which could arguably have limited (if any meaningful) ties to the U.S. It seems inevitable that such actions are set to create a fragmented crypto market with different 'onshore' and 'offshore' (read: G7/20 vs. non-G7/20) liquidity pools.

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