- The CFTC has said that it wants to rewrite its risk rule book to include technologies like digital assets
- Commissioner Christy Goldsmith Romero has called for the agency’s risk rules to be altered to reflect the risks inherent in new technologies
- Goldsmith Romero cited cloud services and AI in the agency’s risk portfolio
The U.S. Commodity Futures Trading Commission (CFTC) may rewrite its risk rules to include emerging technologies such as digital assets, artificial intelligence, and cloud service. Commissioner Christy Goldsmith Romero has called for a comprehensive revision of the agency’s risk management regulations, emphasizing the need for firms to be adequately prepared for the volatility associated with cryptocurrencies and the potential risks inherent in safeguarding customers’ digital assets.
CFTC Looking at Crypto, Cloud Services, and AI
The CFTC released a proposal on Thursday addressing these concerns and inviting public input on potential modifications to its risk management program. Romero underscored the importance of acknowledging that technologies such as digital assets, artificial intelligence, and cloud services have emerged as areas that entail substantial risk, and is seeking feedback on proposed changes to its risk management framework to recognize firms’ abilities to cope with them if exposed.
In a statement to accompany the proposal, Goldsmith Romero noted that such advancements means that the CFTC needs to stay on its toes and have protections in place for companies dealing in digital assets:
These technological advancements, with their accompanying risks, necessitate the commission revisiting our regulatory oversight, including our risk management requirements. Integration of digital assets with banks and brokers, and the risks that could be posed, could continue to evolve.
“Unknown and Unique Risks”
Goldsmith Romero also flagged the ongoing issues regarding the industry’s custody practices, saying “brokers may explore holding customer property in the form of stablecoins or other digital assets that could result in unknown and unique risks.”
The CFTC will take public comments on its “advance notice of proposed rulemaking” for 60 days. This preliminary stage of the rule change process will be followed by a formal proposal and a vote on a final version.
