WASHINGTON—On the same day the North American Securities Administrators Association (NASAA) announced "Operation Cryptosweep," a series of coordinated enforcement actions to crack down on cryptocurrency scams, Commodity Futures Trading Commission (CFTC) Chair J. Christopher Giancarlo also revealed that the two organizations had signed an agreement for greater information sharing between federal commodities and state securities regulators.
Speaking at the NASAA conference in Washington, Giancarlo said that the memorandum of understanding (MOU) between the CFTC and NASAA will bolster "co-operative enforcement" and will focus the various agencies’ collective resources to better uphold the law, HL Engage reported.
Saying that he was making good on the pledge he made when nominated as CFTC chairman to further the collaboration between his organization and other regulatory agencies, Giancarlo called the MOU a "milestone" in the area of U.S. federal and state financial fraud detection and prosecution.
The MOU is the latest development in what Giancarlo called the "evolving state of regulatory oversight of virtual currency markets."
"New financial tools are impacting trading, markets and the entire economic landscape with far ranging implications for capital formation and risk transfer,” Giancarlo said. “These technologies include machine learning and artificial intelligence, algorithm-based trading, data analytics, 'smart' contracts valuing themselves and calculating payments in real-time and distributed ledger technologies, which over time may come to challenge traditional market infrastructure."
‘Profound Mistake’
According to the CFTC Chairman, ignoring these changes would be "a profound mistake", as they will not go away.
“In his view, the role of regulators is therefore not to fight change but to prepare a regulatory and statutory framework that is ‘ahead of the curve,’ prevents and punishes fraud and criminality, gives clarity to emerging technologies and anticipates the evolutions of new instruments such as virtual currencies,” HL Engage said.
"Our task, as market regulators, is to set and enforce rules that foster innovation while promoting market integrity and confidence," Giancarlo said.