According to a directive issued Wednesday night, the Commodity Futures Trading Commission (CFTC) recommends that cryptocurrency derivative firms hold client funds with extreme caution.

The new directive continues the CFTC’s interest in setting rules for the storage of virtual currencies – an area that is markedly different from all other asset classes. On commission:

“Cryptocurrency managers are generally not subject to a comprehensive federal or government regulatory and supervisory system that includes the protection of these new assets, and this increases the potential risk of protecting customers’ money that these managers have.”
Specific provisions in the guidelines define the places where a forward commission (FCM) salesperson can deposit a customer’s virtual currency into a “bank, trust or other FCM or clearing house that scans futures contracts for virtual currencies”.

In addition, FCM warns that they need to keep such deposits in accounts that are clearly identified as customer money, and will not allow profits in one account to compensate for losses in another.

In fact, the guide seems to be overly determined that the client’s cryptocurrencies remain safe and unaffected by preventing FCM from trading these funds for collective gain. The scale of the issue posed by the FCM cryptocurrency deposit trading has not yet been resolved, but you can definitely imagine some catastrophic consequences for a cryptocurrency futures trader who has chosen to practice some volatile cryptocurrency money markets.

CFTC has been busy trying to create a comprehensive framework for cryptoassets. Earlier this month, the committee promised to protect the “fast-growing market” for these assets, following the announcement that they were looking for BitMEX to operate an unlisted US derivatives exchange.

Source: CoinTelegraph

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