The U.S. Commodity Futures Trading Commission (CFTC) will meet on Jan. 26 to review the dual capabilities of bitcoin and the blockchain for the derivatives market. The commission appointed Paul L. Chou, CEO and founder of Ledger X, as a bitcoin trading expert to its technical advisory committee.
The meeting will be from 9:45 a.m. to 3:45 p.m. at the CFTC’s Washington, D.C. headquarters. Attendees will discussion the proposed regulation of automated trading, swap standardization and harmonization, and the potential application of distributed ledger technology to the derivatives market.
LedgerX has applied to operate as a regulated clearing house and exchange for trading bitcoin options. The CFTC is reviewing LedgerX’s derivatives clearing organization application after having approved a temporary swap execution facility license for the company. If approved, LedgerX would be the first federally-regulated bitcoin clearinghouse and options exchange to list and clear fully-collateralized, physically-settled bitcoin options for the institutional market.
The CFTC officially recognized bitcoin as a commodity in September of 2015 when it took enforcement action against a bitcoin operator for being unlicensed. That action marked the most significant bitcoin regulatory move in the U.S., along with the New York State BitLicense, also enacted in 2015.
The CFTC’s technology advisory committee, created in 1999, advises the CFTC on the impact of technology innovations for the securities market and financial services, along with the regulatory and legislative response to the growing use of technology in the markets. Committee members include representatives of financial intermediaries, traders, futures exchanges, self-regulatory organizations, and market participants.
Members of the public who wish to provide written statements should send them by Jan. 26. They should send letters to the attention of the Office of the Secretary at the CFTC headquarters or email them to [email protected]. The CFTC is located at Three Lafayette Centre, 1155 21st St. NW, Washington, DC 20581.
The LedgerX management team comprises Goldman Sachs, MIT, and CFTC alumni, who bring regulatory experience, financial expertise, and technical talent. Directors include Jim Newsome, former chairman of the CFTC and former CEO of NYMEX, and Tom Lewis, former CEO of Ameritrade and former CEO of Green Exchange. Mark Wetjen, the former commissioner of the CFTC and an early advocate of regulating bitcoin derivatives, sits on the board of the LedgerX holding company, Ledger Holdings Inc. Google Ventures and Lightspeed Venture Partners were early investors.
Following is a timeline of major U.S. bitcoin regulatory activity.