Bitcoin and ICOs Risky: Commodity Futures Trading Commission Chairman

Announcements, News, Regulation | December 13, 2017 By:

Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo has warned investors about the risks connected with volatile digital assets.

In a statement, Giancarlo said market participants should take note that the relatively nascent underlying cash markets and exchanges for bitcoin remain largely unregulated markets over which the CFTC has limited statutory authority. He added that investors should be aware of the potentially high level of volatility and risk in these markets.

Giancarlo’s comments were a response to Securities and Exchange Commission (SEC) Chairman Jay Clayton’s statement on initial coin offerings.

Clayton stated that a number of concerns have been raised regarding the cryptocurrency and ICO markets, including that, as they are currently operating, there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.

Giancarlo commended Clayton on his strong statement encouraging professional market participants and the retail investors they serve to recognize risks and legal responsibilities they have regarding cryptocurrencies and initial coin offerings.

“I have said consistently that virtual currencies are unlike any commodity that the CFTC has dealt with in the past, and I know they pose challenges for the SEC as well,” said Giancarlo. “CFTC and SEC staff are in regular communication on these issues.”

The CFTC is an independent agency of the US government created in 1974, that regulates futures and option markets.