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CFTC FinTech Research Wing Welcomes Innovators to Discuss with Regulators With its New Office Hours

LabCFTC, the United States Commodity Futures Trading Commission’s FinTech research wing, is planning to host office hours during the New York FinTech Week.

According to the CFTC’s announcement, the derivatives regulator aims to engage with innovators in the industry during the New York FinTech Week, to be held end of March and early April. The office hours will enable interested innovators to be able to give a presentation to regulators and participate in dedicated discussions.

LabCFTC working with technologists, innovators, and the public

LabCFTC was established in 2017, which aims to promote fintech innovation and competition, as well as providing CFTC with a better understanding of new technologies. The research unit has been very active with over 350 different private meetings held with innovators in the last two years. LabCFTC was awarded status as an independent operating office in October last year; the research unit published three primers to the marketplace based on their understanding of smart contracts, artificial intelligence, and crypto assets. They have also looked into how these three categories are evolving outside of, or challenging the current regulatory dynamic.

United States Commissioner of the Commodities and Futures Trading Commission (CFTC), Brian Quintenz said that one of the main values that the Commission stands by is to “first do no harm, then be technology-neutral.” By engaging with innovators, “to understand what they were doing, to help them understand if what they were doing implicated our rules, and to help the CFTC understand if there is any technology we can take advantage of as an agency to enhance our own processes.”

Rounding up crypto-related regulatory penalties

In the fiscal year of 2019, the CFTC rounded up has collected over $1.3 billion in regulatory and administrative penalties including funds collected from cryptocurrency businesses. The result in regulatory penalties has also increased by 40% compared to the fiscal year of 2018, of around $947 million.

Several charges were pointed out, including the $147 million crypto scheme Control-Finance Ltd, Jon Barry Thompson, who was accused of a $7 million Bitcoin-related fraud, and Joseph Kim, who was charged with defrauding investors. However, the CFTC did not specify the exact amount of regulatory penalties obtained from these companies.

Image via Shutterstock

LabCFTC to Announce the Winner of Project Streetlamp at Fintech-Focused Virtual Events Series Later This Year

The Commodities Futures Trading Commission (CFTC) announced that its FinTech research wing, LabCFTC will be hosting a series of interactive virtual events during autumn 2020.

LabCFTC is an initiative under the General Counsel’s office in 2017 aimed at promoting FinTech innovation and competition. The office has been very active with over 400 different private meetings held with innovators in the last three years.

The series, Empower Innovation 2020, will facilitate dialogues amongst innovators, regulators, market participants, and the public around FinTech innovation. The series of virtual events will consist of a combination of fireside chats, digital roundtables, and tech talks from industry experts. Registration for the event will be open in August.

LabCFTC will also be announcing the winner of Project Streetlamp, the CFTC’s first science prize competition. The focus of Project Streetlamp is to challenge innovators to utilize artificial intelligence (AI) to help with a CFTC enforcement tool to identify foreign entities to add to its Registration Deficient List (RED List). The RED List is meant to identify foreign entities that act in a way that requires CFTC registration.

Due to the emergence of the coronavirus pandemic, a lot of LabCFTC’s priorities have been delayed, and the top priority across the Commission is to address the market and to help market participants during this time. The Empower Innovation 2020 series will be held as a series of virtual events due to COVID-19 and in lieu of the 2020 FinTech Forward conference.

CFTC Chairman Heath P. Tarbert said in a release shared with Blockchain.News:

“Encouraging innovation and enhancing the regulatory experience for market participants is essential to what we do at the CFTC. As our markets adapt in the wake of COVID-19, so too must we innovate and adapt. I am incredibly proud of the LabCFTC team for working through the challenges of assembling innovators and global regulators virtually to facilitate these conversations, and I look forward to participating in what I am sure will be engaging and informative events.”

In an exclusive interview with Blockchain.News, LabCFTC Director, and Chief Innovation Officer Melissa Netram said:

“I think the crisis showed us even more of how important financial innovation and technology is. If this happened 20 years ago we would not be able to continue our normal functions of the day, to work remotely.”

Approach to Crypto Regulation is More Proactive: CFTC Chair

The Chairman of the United States Commodity Futures Trading Commission (CFTC) has revealed that the commission is more than ready to commit to regulatory oversight of the digital currency ecosystem as the industry evolves.

Rostin Behnam re-emphasized this commitment while giving a keynote address at the Brookings Institution Webcast on The Future of Crypto Regulation.

In the speech, Behnam said the commission had done much to permit the crypto industry to innovate at a healthy pace while enforcing guidelines that foster responsible product creation and market engagement.

While there is obviously more work to be done, Behnam said he is “encouraged by the bipartisan and bicameral support for legislation that recognizes the need for guardrails around the burgeoning digital asset economy and calls for regulation to impart transparency, accountability, stability, customer protections, and oversight across the crypto verse.”

Looking forward, the CFTC chair said the commission would be providing oversight to the crypto industry in a proactive manner with the tools that are currently available. To this end, Behnam announced that the LabCFTC unit of the commission, established by former Chairman Christopher Giancarlo will be rebranded as the Office of Technology Innovation (OTI) with an updated operating model.

“OTI will continue to lead the CFTC’s efforts in incorporating innovation and technology into our regulatory oversight and mission-critical functions, and it will do so purposefully by supporting the operating divisions and the Commission’s participation in domestic and international coordination,” Behnam said.

The CFTC chairman also highlighted how the commission will enhance its education drive with the realignment of the Office of Customer Education and Outreach within the Office of Public Affairs.

As one of the core agencies regulating the financial markets in the US, the CFTC is also obligated to join the cause to develop a unique framework for the cryptocurrency ecosystem as instructed in President Joe Biden’s Executive Order.