The director of the CFTC ( U.S. Commodity Futures Trading Commission ) has talked of the need for balance and a "do no harm" way when regulating cryptocurrencies.
In a written testimony presented to the Senate Banking Committee today, J. Christopher Giancarlo said that in this "new digital era" for the financial markets, cryptocurrencies have brought "paradigm shift" in how the world views payments and financial processes, and that ignoring such innovation "will not make them go away, nor is it a responsible regulatory response."
Giancarlo continued:
"'Do not harm' was the right approach to the development of the Internet. Similarly, I believe that 'do no harm' is the right overarching strategy for shared ledger technology. With the proper balance of sound policy, administrative oversight and private sector innovation, brand-new technologies will allow American markets to grow in responsible ways and continue to improve our economy and increase prosperity."
These actions confirm that the CFTC, in connection with the SEC and other financial enforcement agencies, will protect investors and "aggressively prosecute" cryptocurrency projects that engage in manipulation and fraud.
Giancarlo further discussed the recent arrival of self-certified bitcoin futures products, which have seen some judgment from the traditional futures sector.
He argued that it is the role of the futures clearinghouses and futures exchanges, themselves, and not the CFTC, to discuss concerns over new product self-certifications.
However, the director said that the commission had added an element to the Review and Compliance Checklist for cryptocurrency futures products.
Additionally, the CFTC will take a "close look" at governance around such products and develop suggestions for possible further action.