CFTC Offers Regulatory Clarity for Crypto Firms with Updated Guidance
The U.S. Commodity Futures Trading Commission (CFTC) has updated its guidance concerning tokenized assets and the use of blockchain technology for recordkeeping, aiming to provide greater regulatory clarity for the cryptocurrency industry.
In a notice issued Thursday, the CFTC announced revisions to its frequently asked questions for registered crypto-related entities. The updated guidance, originally released in March, now specifies that authorized companies may invest customer funds in tokenized assets. This is permissible as long as “the tokenized form of the asset grants the holder legal and economic rights that are the same or functionally equivalent to the rights received by holders of the asset in its traditional form.” The regulator also stated it “would not object” to companies employing blockchain-based recordkeeping under these new rules.
CFTC Chair Michael Selig emphasized that these changes are part of ongoing efforts “to provide regulatory clarity for the crypto industry.”
This development follows closely on the heels of the U.S. Senate’s failure to advance the Digital Asset Market Clarity (CLARITY) Act. The proposed legislation was intended to delineate the oversight responsibilities of the CFTC and the Securities and Exchange Commission (SEC) regarding digital assets.
The unsuccessful cloture vote has led many to anticipate that Congress may not enact comprehensive crypto market structure legislation before 2027. Consequently, regulators are expected to proceed with establishing their own policies through rulemaking. The CFTC has already submitted a plan for crypto market regulation to the White House for review.
Echoing the sentiment of the commodities regulator, SEC Chair Paul Atkins had previously stated, prior to the CLARITY Act vote, that the agency was “ready, willing, and able” to propose rules for crypto in the absence of congressional action. The SEC had proposed rules concerning “certain investment contracts involving crypto assets” in August.
