CFTC to look into updating rules to address AI and crypto risks


CFTC published a proposal to revise its risk management rules to address threats from “emerging technologies” like cryptocurrencies and artificial intelligence (AI).

The rules apply to swap dealers and futures commission merchants.

The agency will accept public comments within the next 60 days. After that, a formally proposed set of rules will be developed. The final version of the rules will go through a voting procedure for approval.

“Some markets have begun to implement DLT or study their applications. Cloud storage and computing have become widespread, and the potential of AI is increasingly recognized. Along with these advances, there are inherent risks that need to be addressed and effectively managed.” CFTC commissioner Christy Goldsmith Romero commented.

The official singled out the risks associated with the digital asset markets, citing the termination of Silvergate and Signature banks.

Problems could also arise in regulated crypto derivatives trading, Romero said. Unregulated spot markets pose additional threats, as evidenced by the collapse of FTX, Terra, Celsius and others, she added.

“This is in addition to the operational risks and threats associated with fraud and illegal financing in some segments of the digital asset markets,” she explained.

Another area of ​​focus for the CFTC is the custody of cryptocurrencies.

“Brokers may consider holding client property in the form of stablecoins or other digital assets, which may result in unknown and unique risks. These infrastructure players may face third-party custodial risks.” she stressed.

Earlier, the head of the CFTC, Rostin Benham, said that decentralized exchanges will be regulated by his department or SECeven if the platforms operate autonomously or with minimal human involvement.

Prior to this, the official warned participants in the crypto industry about the inevitability of regulation.

Recall that in March 2023, the CFTC filed a lawsuit against the Binance exchange and its CEO Changpeng Zhao. According to the agency, the platform violated the rules for trading derivatives by operating without proper registration.

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