Exchange Giant FTX Releases 10 Proposals For Crypto Market Regulators

Crypto exchange giant FTX has released a list of 10 proposals for market regulators in the United States seeking to oversee the digital asset space.

In a new blog post, the exchange reveals what it calls “FTX Key Principles for Regulating the Crypto-Trading Platform Market.”

First on the list is to have a senior market regulator who would be responsible for listing crypto assets in the cash and derivatives markets.

FTX claims that spot and derivative markets subject to different regulatory programs create inefficient and sub-optimal market structures.

“We are proposing as a solution an alternative regulatory approach that would give market operators the option of opting for a unified regulatory regime for cash and derivatives markets, via a principal regulator model. “

The FTX list also contains practices regarding the safekeeping of crypto assets on behalf of clients. The exchange says there should be more disclosure about how funds are handled behind the scenes.

“The main areas of focus and disclosure should include: portfolio architecture; whether the insurance is provided by the custodian; how private keys are secured, managed and transferred; manage the risks associated with collusion or insider fraud; and the physical security of data centers.

FTX also offers standards for how exchanges treat stablecoins. According to the exchange, some stable coins may not be sufficiently backed by suitable assets.

“For example, a stable coin backed by risky and volatile assets and not transparently backed by an adequate quantity of those assets with appropriate haircuts, could be exposed to price risk. This price risk could interfere with the finality of the settlement on the platform, as the value of the stable coin delivered as payment for the crypto assets in a transaction on the platform is suddenly not equal.

FTX’s list of proposals ends with a suggestion for standard Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols for the crypto industry.

“However, it is essential that the regulation of the crypto market continue to require special attention to the execution of the KYC and AML obligations. To ensure this, marketplace operators should perform periodic self-audits and should also be subject to regular review and review by their lead regulator on these requirements. “

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