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New CFTC chair welcomes crypto – but warns of “cyber risks”

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The incoming chair of one of America’s leading regulatory bodies has sounded a positive yet cautious note about the world of cryptocurrencies and appeared to make a quick remark about the risks of crypto fraud.

Dr Heath P. Tarbert, who is set to be Chair of the Commodity Futures Trading Commission, made his remarks in an article published by the major American news network Fox News.

Arguing that the blockchain system which powers cryptocurrencies “hold great promise”, Tarbert said that “a new asset class” had to require a better framework.

“Technological innovations such as blockchain hold great promise, and the rise of digital ‘currencies’ has created a new asset class”, he said.

“Working with our counterparts, the CFTC must develop a holistic framework for these 21st-century commodities.”

He also pointed out that risks like cyber fraud should not be ignored.

“We must also keep a weather eye against emerging threats, especially cyber risks. Protecting against these risks, which includes protecting confidential trading data, is a top priority of the CFTC as well as the firms and exchanges we regulate.”

He also drew a distinction between the objects of CFTC regulation and the methods of doing so.

“How we regulate is just as important as what we regulate”, he said.

“Reinvigorating our historical principles-based approach, where appropriate, will help our markets remain fair, innovative, and vibrant.”

The Commodity Futures Trading Commission is responsible for regulating America’s futures and options markets and is a common feature in crypto news stories.

It regularly brings cases against people who are accused of committing crypto fraud, or participates in building the prosecution’s case against them.

Tarbert will be replacing someone who was well-liked within the crypto world. He will be taking over from J. Christopher Giancarlo, who has served in the position since 2014. Giancarlo was even referred to as “Crypto Dad” by some in the media as a result of his support for the sector.

In words written as pre-prepared testimony to the US Senate’s Banking Committee last year, Giancarlo made it clear that he believed that the technology behind crypto could “increase prosperity”, provided that the CFTC took a “do no harm” approach.

“I believe that ‘do no harm’ is the right overarching approach for distributed ledger technology”, he said at the time.

“With the proper balance of sound policy, regulatory oversight and private sector innovation, new technologies will allow American markets to evolve in responsible ways and continue to grow our economy and increase prosperity”, he added.

In a sign that the crypto industry may continue to enjoy a supportive regulator in the CFTC Chair position, Giancarlo has given his endorsement to his successor.

“During my time of service, it has been a priority to transform the CFTC into a 21st Century regulator for today’s digital markets. With Dr. Tarbert’s confirmation, I know the agency is in safe hands to continue this transition”, he said at the time of Tarbert’s successful confirmation hearing in front of the US Senate.