So, Crypto exchange giant FTX is releasing 10 proposal lists for the market regulators in the US. Of course, desiring to oversee the digital asset space.
Furthermore, during a blog post, the exchange, FTX releases “FTX’s Key Principles for Market Regulation of Crypto-Trading Platforms.”
Firstly, there should be one primary market regulator responsible for the listings of crypto assets in spot and derivatives markets.
So, FTX Insists that spot markets and derivatives markets under different regulatory programs brings inefficient and sub-optimal market structures.
So, FTX explains.
“We propose as a solution an alternative regulatory approach that would provide market…”
“operators the ability to opt in to a unified regulatory regime for spot and derivatives…”
“marketplaces, through a primary regulator model.”
Then, FTX mentions practices about the custody of crypto assets on behalf of clients.
More so, The exchange highlights the need for more disclosure on handling funds behind the scenes.
Also, “Key areas of focus and disclosure should include: wallet architecture;…”
“whether insurance is provided by the custodian; how private keys are kept secure,…”
“managed and transferred; managing risks related to insider collusion or fraud;…”
“and physical security of data centers.”
Furthermore, FTX mentions standards on how exchanges deal with stablecoins. Then, states some stablecoins faces risk of not having sufficient support by proper assets.
More so, “For example, a stable coin backed by risky and volatile assets and not transparently backed…”
“by an adequate amount of such assets with appropriate haircuts,…”
“could become exposed to price risk. This price risk could interfere with settlement finality on the platform,…”
“insofar as the value of the stable coin delivered as payment for the…”
“crypto assets in a transaction on the platform are suddenly not equal.”
Lastly, FTX mentions a suggestion for standard know-your-customer (KYC) and anti-money laundering (AML) protocols for the crypto industry.
Additionally, “However accomplished, it is critical that crypto marketplace regulation continues to require…”
“significant focus on the performance of KYC and AML obligations…”
“To ensure this, marketplace operators should be performing periodic self-audits and should…”
“also be subject to regular review and exam by their primary regulator on these requirements.”
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