CFTC Divisions Update FAQs On Crypto Assets And Blockchain Technologies

What You Need To Know:

• The FAQs are staff views, not binding law. The updated FAQs provide interpretive guidance only. They do not amend the Commodity Exchange Act (CEA) or CFTC regulations, create a safe harbor or new exemption, or provide a no-action position.
• Tokenized Regulation 1.25 investments remain subject to Regulation 1.25. The staff’s response to Question 12 states that a Futures Commission Merchant (FCM) or Derivatives Clearing Organization (DCO) may use a tokenized form of an investment otherwise permitted under Regulation 1.25, only if the tokenized form satisfies the applicable requirements of that regulation.
• DLT may be used for required records. The staff’s responses to Questions 13 and 14 state that Regulations 1.31 and 45.2 are technology-neutral. Thus, blockchain or DLT can be used to satisfy CFTC recordkeeping requirements if it satisfies applicable requirements thereof, such as supporting prompt production upon demand and access in the required form, and is