FTX Proposes Changes to U.S. Crypto Regulations

The firm wants crypto exchanges to be able to elect a single primary regulator.

Shutterstock cover by Sergei Elagin.

Key Takeaways

  • FTX has published a document suggesting regulatory changes that could produce more flexible options for exchanges.
  • In particular, it suggests that spot and derivatives exchanges should be able to select just one primary regulator.
  • FTX also recommends greater regulations for stablecoins.

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Crypto exchange FTX has published a document suggesting changes to U.S. regulations that could provide greater flexibility. The document lays out ten principles.

FTX Wants Primary Regulator Option

FTX has weighed in on cryptocurrency regulation, publishing a document earlier today that changes to U.S. regulatory policy. Primarily, FTX suggests that exchanges should be able to select a single primary regulator.

“As many know, the CFTC is the primary regulator of commodity derivatives marketplaces, while the SEC is the primary regulator of cash securities marketplaces,” FTX notes. As some exchanges deal with both spot trading and derivatives trading, FTX suggests a framework that allows an exchange to “elect one market regulator as its primary regulator.”

This approach would undoubtedly be useful to FTX itself, which operates both a spot exchange and a derivatives exchange.

The rest of FTX’s principles deal with topics such as custody of assets, risk assessment, customer protection, KYC/AML, and other common matters related to financial regulatory compliance.

Notably, one section focuses on stablecoin regulation, a topic that FTX has previously commented on. The exchange wishes to see regulators keep a list of registered stablecoins and ensure that those coins are regularly audited by an accounting firm.

Coinbase Put Forward a Similar Request

Competing crypto exchange Coinbase put out a similar document in October. It similarly recommended a unified approach to regulation; however, it suggested that the U.S. government create a single regulator rather than allowing exchanges to elect one.

The news comes as executives from FTX and Coinbase are scheduled to testify before Congress next week. It remains to be seen if the topic of regulatory reform will be raised at that meeting.

FTX is currently the fifth largest crypto exchange, handling $4 billion in volume over the past 24 hours. Its derivatives exchange is the second largest in operation, with $8 billion in open interest.

Disclosure: At the time of writing, the author of this piece owned less than $100 of BTC, ETH, and altcoins.

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