CFTC Puts Breaks on ICE’s Bitcoin Futures Plans

Intercontinental Exchange’s (ICE) plans to launch bitcoin futures have been scuppered – once more – by US regulators.

The change operator initially deliberate to launch the brand new merchandise in November of final 12 months.

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But the Commodity Futures Trading Commission (CFTC) has refused to present its approval to the brand new service.

Bakkt – ICE’s title for the undertaking – ran afoul of the regulator over its plans to retailer clients’ bitcoins.

According to the Wall Street Journal, the CFTC advised ICE in February that its custodial plans would require public disclosure of its marketing strategy and a public remark interval.

It seems that ICE has not agreed to these phrases and that the dispute between the change and the regulator is continuous.

At the crux of that dispute is the truth that cryptocurrencies are successfully a brand new asset class.

Thus, regulators are uncertain as to how they need to be handled and have, in lots of instances, merely transplanted previous laws on to a brand new product.

Collateral laws on the planet of bitcoin

In prior bulletins, ICE has mentioned that it will settle bitcoin futures transactions each day.

That would imply that companies buying and selling in these futures would, relying on whether or not they had gained or misplaced cash, settle for bitcoin from Bakkt or deposit the cryptocurrency into the change’s digital vault.

Alongside these custodial issues is the matter of collateral. When buying and selling in futures, companies will sometimes put down collateral in fiat foreign money.

But within the case of Bakkt’s bitcoin futures, although the precept of placing down cash is identical, collateral could possibly be paid in cryptocurrency.

That raises issues for the CFTC because the regulator is but to have handled such a scenario earlier than.

How the regulator and change operator will finally resolve their variations stays unclear. In the meantime, the cryptocurrency bear market continues unabated.

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David is the founder of The firm originates business financing for companies of all size in the Canadian marketplace . Originations include business loans, term loans, asset based lines of credit, SR ED Tax credit financing , and receivable financing .

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