An ether future contract is going to be approved by the U.S. Commodity Futures Trading Commission or CFTC. Bitcoin future market has already been allowed launch. CME Group and Cboe Global exchange is providing cash settled contracts at the end of 2017. Now regulators are coming forward to ether for the similar product. The official said that a derivative exchange is willing to launch this particular product. If any particular fulfills their requirements he thinks that there is a good chance that it would be self-certified or allowed by them.
It means the CFTC would only respond to a specific application. A cash-settled prospects or future contract which is paid out in fiat as opposed to the crypto, would permit speculative stock investments and so forth to pick up introduction to ether without agonizing over custody. It is hoped that CFTC-supervised Future market could build a confidence among regulators for example to say that SEC could pave the way for an ETF. It will also bolster retail investor’s confidence in ether. Bitcoin future which was launched by CME and Cboe had a positive response because traders were very much willing to purchase Cboe’s contracts. Bitcoin’s price had already reached its peak and the sanction of futures just occurred.
Ethereum is the world’s second-largest cryptocurrency. Ethereum was first indicated by CFTC in December at the time the regulator disclosed a RFI which was enshrined with many questions by market cap. There were questions from proof-of-stake, auditing process of deposits and also about the impact the introduction of derivatives on cryptocurrency. The CFTC was looking to contrast ether with bitcoin. RFI will benefit regulators in two ways:
-developing better relationship with the crypto community at large,
-helping regulator to understand the range of issues that might exist around the ether space.
To comprehend various technologies, markets and the differences in community, engaging in outreach is compulsory. Trade associations including Chamber of Digital Commerce, Coin Center, Blockchain LLC, Coinbase submitted a total of 35 comments to the CFTC’s RFI.
Regarding Power Grab
Sanctioning an ether futures contracts and access of investors to new derivatives products can tie regulatory authority of CFTC over the existing spot market. By regulating a future contracts on ethereum would allow the CFTC some linked oversight on the ethereum spot market is the belief of ErisX. The CEO of the exchange namely Thomas Chippas thinks that a future contract in the U.S. can develop the CFTC’s ability to properly supervise the cash market for fraud and manipulation. CFTC has some jurisdictions over the ether cash market. There are some limited regulatory oversights over cryptocurrency spot market mentioned the ability to take legendary action if there is any fraud in these spot markets.
Amy Davine Kim noted that regulator has after-the-fact enforcement jurisdictions over crypto spot markets in terms of fraud. The officials at the SEC thinks ether isn’t a security has not been officially resolved. William Hinman doesn’t see ether as a security.