CFTC Aims to Manage Crypto and AI Risks

CFTC Aims to Manage Crypto and AI Risks

The Commodity Futures Trading Commission (CFTC) has proposed a new rule to revise its existing rules related to risk management, accounting for risks associated with “evolving technologies” such as cryptocurrencies and artificial intelligence (AI).

Commissioner Dawn Stump Romero highlighted how emerging technologies come with inherent risks that must be addressed and managed effectively. This includes risks associated with digital asset markets, such as the recent collapses of Silvergate and Signature banks, which provided services to many prominent crypto firms.

Additionally, Romero stressed that regulated trading in crypto derivatives can also carry risks, while "unregulated spot markets carry additional risks, as seen with the collapse of FTX, Terra Luna, Celsius, and numerous others that have resulted in substantial losses."

The CFTC is accepting public comments for 60 days before developing a formal proposed rule set, which will undergo a voting process for approval. The regulatory agency has been keeping a close eye on the crypto industry, warning registered firms and applicants about new products and services related to crypto.

This move shows how regulatory bodies are seeking to manage the risks associated with emerging technologies such as cryptocurrencies, AI, and blockchain. It highlights the need for clear guidelines to help protect investors, combat fraud, and promote transparency in these new areas of the financial markets.

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