CFTC Chair Giancarlo Details Risks Of Virtual Currency

CFTC Chair J. Christopher Giancarlo reasserted the "obligation of futures exchanges to ensure that virtual currency futures are not susceptible to manipulation, and of futures clearinghouses to ensure that such products are adequately risk managed." In remarks at the ABA Derivatives and Futures Section Conference in Naples, Florida, CFTC Chair J. Christopher Giancarlo described the impact of virtual currencies on the U.S. derivatives markets and reiterated his support for a deference-based approach to the U.S. and European Union cross-border regulation of swaps.

Chair Giancarlo said that virtual currencies have already had significant effects on the markets. He raised questions about their actual value, given their high volatility and instability as a store of value. He also argued that virtual currencies represent a small asset class that receives outsized media attention, but warned that they present serious risks.