The Guidance Sets Forth Five Areas Of Focus For Exchanges And Clearinghouses In Listing A New Virtual Currency Derivatives Contract Pursuant To Commission Regulation 40.2 Or 40.3, Including:
Since bitcoin does not rely on intermediaries, it may lower transaction costs for businesses and emerge as a major means of electronic payment processing. Virtual currency investment products, e., collective investment schemes or derivatives such as options and contracts for differences that have virtual currencies as an underlying or invest in virtual currency related businesses and infrastructure; Derivatives are an important part of the cryptocurrency market.
Whether Bitcoin, Ether Or Any Other Virtual Currency Will One Day Be Widely And
The interpretive notice requires fcm and. Furthermore, futures trading allows traders to use leverage to gain more exposure. In january 2018, customer’s virtual currencies managed by an sp (“virtual currency under management”) were stolen due to illegal access.
Ethereum’s Native Virtual Currency, Ether, Went Live In 2015 And Opened Up A New Phase In The Evolution Of Virtual Currency.
Nfa publishes new disclosure requirements for virtual currency and virtual currency derivatives trading august 21, 2018 the national futures association (nfa), the u.s. Convertible virtual currency usually has a measurable value. The national futures association has sent a rule submission letter to the cftc regarding new disclosure obligations for fcms, ibs, cpos, ctas, and pools and managed account programs engaging in virtual currency derivatives and virtual currency transactions as well as other activities in underlying or spot virtual currencies would require the new disclosure.
The Advent Of Virtual Currency Markets Has Presented Several New Challenges For The Commission In Its Efforts To Carry Out Its Mission.
Investors use futures in order to profit not only with the price of a virtual currency going up, but also with the price of a digital asset falling. Each virtual currency derivatives contract currently ties its price in some way, through various settlement processes, to prices of virtual currency on certain cash market platforms. Derivatives on virtual currencies may fall under the following categories of financial instruments:
Virtual Currencies And Virtual Currency Derivatives (I.e., Futures, Options And Cleared Swaps) Have A Variety Of Unique And Potentially Significant Risks.
Nfa's board of directors is concerned that these products may be attracting customers that do not fully understand their nature, the substantial risk of loss that could arise from trading. The advisory provides guidance on certain enhancements when listing a derivative contract based on virtual currency. Virtual currencies such as bitcoin represent an innovation in financial services products and technology that has the potential to support more efficient and transparent global commerce.