Eli Cohen’s Skepticism on CFTC Advisory
Eli Cohen, the general counsel for the real-world asset tokenization enterprise Centrifuge, has expressed skepticism regarding the Commodity Futures Trading Commission’s (CFTC) recent advisory related to offshore exchanges facilitating services for U.S. residents through the Foreign Board of Trade (FBOT) framework.
Challenges of the FBOT Framework
According to Cohen, the strict settlement, clearing, and regulatory prerequisites aligned with traditional financial operations render the FBOT framework impractical for cryptocurrency exchanges. He elaborated that only Fully Licensed Futures Commission Merchants (FCMs) and other highly regulated entities are eligible to participate in this framework, a requirement that inherently limits participation to regulated exchanges existing outside the U.S.
Cohen pointed out the challenge that many exchanges prefer to operate in jurisdictions like Seychelles, where regulations are looser, as this allows them to bypass the complexities proposed in the advisory.
Call for Comprehensive Regulation
To truly foster clarity and support for crypto exchanges, he suggested Congress should consider enacting a comprehensive crypto market structure bill that would establish a stable regulatory environment, free from shifts with changing administrations.
CFTC’s “Crypto Sprint” Initiative
In parallel, the CFTC’s initiative named “crypto sprint” aims to reshape the regulatory landscape surrounding digital assets, reflecting former President Donald Trump’s objective to position the U.S. as a frontrunner in the global cryptocurrency arena. The CFTC’s advisory follows recommendations from a July report by the Trump administration, advocating for joint regulatory oversight by the CFTC and the SEC over cryptocurrency markets.
Among the proposals is a visionary shift towards perpetual financial markets, which could enable uninterrupted trading across various asset classes, a marked contrast to the current operational hours that exclude nights and weekends, as well as certain holidays.
