The boss of a major US regulatory body has issued a mix of anti-fraud warnings and upbeat messages on the topic of cryptocurrency.
During an interview on the Fast Money show on major American network CNBC, Chris Giancarlo said that while the body recognised there was work to do, it knew that crypto would persist and not go away.
Giancarlo, who serves as the chair of the Commodity Futures Trading Commission (CFTC), said that being “thoughtful” about the issue of regulation was important.
“We are very focused on fraud and manipulation in the crypto space and very active at it”, he told interviewer Bob Pisani.
However, despite Giancarlo’s clear focus on cryptocurrency fraud and potential market interference, he did also point out some of the positives of crypto – including the financial product innovations that they have delivered, especially in America.
“And yet it is the United States that has gone forward with the very first bitcoin derivatives and futures with the CME and bitcoin options and bitcoin clearing”, he said.
“We are ahead of the world in that. However, there are some other areas where we need to take a more thoughtful approach.”
The CFTC has, in general, long since been a supporter of cryptocurrencies – provided that they are brought to the market in a way that is responsible.
Just last week, Daniel Gorfine, Director of LabCFTC, the body’s financial technology research unit, told the US Congress that “hasty regulatory pronouncements” would probably not work.
“We all have the shared goal to bring clarity and certainty to the market but [we] also need to be sure that we are thoughtful in our approach and do not steer or impede the development of this area of innovation,” he said.
“Indeed, while some may seek the immediate establishment of bright lines, the reality is that hasty regulatory pronouncements are likely to miss the mark, have unintended consequences, or fail to capture important nuance regarding the structure of new products or models.”
In a brochure published on its website, the CFTC continued with its optimistic yet cautious tone.
“While virtual currencies have potential benefits, the market overall is largely unregulated, so beware”, it writes.
However, the organisation does find itself limited in some ways due to ongoing question marks over exactly what cryptocurrencies are legally.
Many cryptocurrencies, including Bitcoin, have been designated as commodities under the Commodity Exchange Act.
However, this is questioned by some people. Other crypto-related products, such as Bitcoin ETFs (exchange-traded funds) have been labelled as falling under the jurisdiction of the SEC (the Securities and Exchange Commission).
In practice, this limits the role of the CFTC. It does, however, lead enforcement activities against those suspected of cryptocurrency fraud.
Just last week, it charged two people who it suspects were responsible for producing false accounting statements for their cryptocurrency investors as well as impersonating the CFTC.
“The CFTC is on guard against fraudsters who try to take advantage of the CFTC’s reputation in order to cheat customers, and will take swift action against such misconduct”, a spokesperson said.