SEC and CFTC chairs discuss crypto regulation at ISDA conference

The annual meeting of the International Swaps and Derivatives Association (ISDA) began in Madrid on Wednesday. SEC Chairman Gary Gensler and Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam both attended the event as keynote speakers, with Behnam speaking at the morning session and Gensler speaking at the afternoon session.

benan spoke Detailing “Entities seeking to provide non-intermediary clearing of margin products to retail participants require amendment of order to register as a Derivatives Clearing Organization (DCO)”, transparent reference to FTX US Require.

“As other registered entities have expressed interest in exploring a similar model, taking into account the potential impact on clearing members and FCMs [futures commission merchants]” […] Transparency and providing an opportunity to hear from the public are critical.

FTX CEO Sam Bankman-Fried may have been listening to Behnam, as Bankman-Fried was in attendance and joined the fireside chat hours later.

Benin went on to say Recalling his February Senate testimony and said:

“I will continue to advocate and support the CFTC’s legislative mandate to develop a regulatory framework for the cash digital asset commodity market.”

Currently, the CFTC only regulates derivatives markets, although it exercises enforcement powers over spot markets, such as its fine on Coinbase Improper reporting and “self-dealing” of trading volumes in 2021.

Related stories: Bipartisan bill gives CFTC powers over exchanges and stablecoins

Gensler spoke On the “Intersection of Crypto Assets and Derivatives,” his presentation was much shorter. He said:

“If platforms—whether in decentralized or centralized finance—offer security-based swaps, they are subject to securities laws and must operate within our securities regime.”

Gensler emphasized that ISDA needs to “recognize that if the underlying asset is a security, derivatives must comply with securities regulations,” as it sets legal standards for crypto derivatives.