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FTX releases crypto regulation proposals before US congressional hearing

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FTX, a cryptocurrency exchange based in the Bahamas, has produced a set of principles and ideas to assist policymakers in developing the regulatory environment. The policy promotes numerous top crypto exchanges’ market-structure decisions and urges to implement them across all jurisdictions.

After Maxine Waters, the leader of the House Committee on Financial Services, asked several CEOs of leading crypto firms to testify on the topic of digital assets and the future of finance, FTX published the blog “FTX’s Key Principles for Market Regulation.”

One of the ten fundamental principles advocates for a new regulatory strategy. That offers a unified regulatory system for spot and derivatives markets.

FTX further explains why a direct membership market structure is necessary. Which allows businesses to conduct regulated trades without the involvement of a third party. The exchange also proposes a rule requiring more transparency from crypto-asset custodians. Claiming that “customers should be provided visibility” into how custodial services intend to manage fraud and theft problems.

Guidelines for reporting transactional behaviour are crucial

In order to avoid market manipulation and maintain client protection, the blog also calls for guidelines for reporting transactional behaviour. The need to regulate stablecoin issuance also highlighted by FTX:

“A platform operator that allows the use of stablecoins for transaction settlement should be required to explain the criteria it uses to determine which stablecoins it allows for such purposes.”

On the other hand, FTX CEO Sam Bankman-Fried revealed in August that the exchange was taking aggressive steps to simplify its Know Your Customer (KYC) procedures.

Bankman-Fried introduced a new feature on FTX that certifies a user’s jurisdiction based on their registered phone number. Citing the significance of KYC tools for cryptocurrency’s mainstream adoption:

“In order to further verify users, we cross-check their phone numbers to their KYC1 names”. We’ll need KYC2 to access several parts of the site, including futures. If this doesn’t function or there isn’t enough data.”

FTX.US daily trading volume increased by 512% in Q3

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