According to guidelines issued Wednesday evening, the Commodity Futures Trading Commission (CFTC) advises companies trading in crypto derivatives to keep customer funds very carefully.
The new guidance continues the interest of the CFTC in defining rules for the custody of virtual currencies, an environment different from any other class of properties. The Commission usually does not subject virtual currency custodians to a rigorous federal or state regulation and supervision system, which requires the safeguarding of these emerging assets. This poses potential risks to the security of customer funds kept by those custodians. The guidance’s necessary provisions restrict the locations that can be deposited by a futures commission merchant (FCM) to a bank, trust firm, or other FCM, or with a clearing organization that clears futures in virtual currencies.
Besides, the CFTC warns FCMs that all such deposits need to be held in accounts specifically identified as customer funds. They will not allow profits in one account to compensate for losses in another.
Virtually, the advice seems to be most adamant that crypto funds from customers remain secure and untouched, prohibiting FCMs from selling those funds to make mutual profits. How big an issue FCM crypto deposit trading has proven to go unaddressed, but you can imagine some disastrous outcomes of a crypto futures trader trying to use crypto funds to play some unpredictable markets.
The CFTC has been busy attempting to assemble a comprehensive crypto-asset system. The commission promised to protect the burgeoning market for these assets at the beginning of this month, an announcement that came immediately after the announcement of their pursuit of BitMEX to run an unregistered derivatives exchange in the U.S.