Cftc Reporting -

Wild West to crypto best: how compliance separates cowboys from champions

At the heart of early cryptocurrency was the ideal that cross-border transactions could exist outside the system, untraceable and pseudonymous. That’s about to change.
The Financial Action Task Force (FATF) is one of the most powerful standards-setting bodies on the planet, and as reported by Bloomberg, is due to recommend the most important regulatory change ever to hit the cryptocurrency industry.
There’s a new sheriff in town for crypto.
The FATF wants regulators to instil recognisable user data at the heart of all new rules on cryptocurrency trading and transactions.
The imposition of this so-called ‘travel rule’ represents a trying time for the industry. Blockchains are not, on the whole, designed to register this kind of on-chain identifying information.
Some would argue that forcing old-tech rules onto crypto will decrease transparency, not improve it.
But whether the rule comes to fruition or not in its current form is a moot point. The outcome is the same: major players will be forced into closer collaboration with regulators and with one another. And as we know, fully-regulated businesses can attract better, more secure funding from more sophisticated investors.
Kay Why See
From Malaysia to San Marino, Switzerland to Wyoming, forward-thinking states and nations are writing laws to pull digital asset exchanges into their day-to-day oversight.
Reputable and regulated exchanges – just as in the mainstream equity world – require investors to identify themselves if they want to buy crypto-assets.
This is because modern money transfer laws all require some level of Know Your Customer (KYC) process to identify where money has come from, and where is it going.
Even Shapeshift, once the darling of the anonymity crowd, has had to fall in line. CEO, Erik Vorhees, announcing the layoff of a third of its workforce, admitted that failing to prepare to share user data for KYC had devastated the company financially.
Those that can prove they will work with the system, not against it, will be allowed to reap the rewards.
As proof, the world’s largest digital asset exchanges will sit down with global policymakers in Japan later this month for a crucial meeting to determine how the FATF proposal will affect the industry.
The meeting, which coincides with the G20 summit in Osaka, will count exchanges like Coinbase, Kraken, Huobi and the Goldman Sachs-backed, Circle among its numbers.
As digital asset professionals we need to be in close contact with regulators, putting forward our case and making sure the benefits of what we bring to the table are heard.
Facebook creates crypto buzz
Facebook’s Libra cryptocurrency has ignited mainstream interest in the space once again.
Technical details of the project have now been shared in a 29-page whitepaper, borrowing from Bitcoin and Ethereum to power a new global currency.
And regulation was there from the beginning.
Libra, Bitcoin and Ethereum putting crypto on the map.
It’s no accident that Mark Zuckerberg went to the Commodity Futures Trading Commission (CFTC) to talk about how his in-house crypto would work, long before it ever came to market.
The cynicism and suspicion that once characterised regulatory approaches to crypto assets is on the way out, too.
In fact, the CFTC, which oversees the US derivatives and futures market, has grown much fonder of blockchain.
Officials even suggested in a June 2019 speech to the Italian securities regulator, CONSOB, that blockchain-based records could have helped to prevent the 2008 financial crisis.
Outgoing chairman J. Christopher Giancarlo said: “Imagine if regulators could have viewed a real-time distributed ledger […]to recognise anomalies in market-wide trade activity and diverging counterparty exposures indicating heightened risk of bank failure?”
He added: “What a difference it would have made a decade ago if blockchain technology on a private distributed ledger accessible to regulators had been the informational foundation of Wall Street’s derivatives exposures. At a minimum, it would certainly have allowed for far faster, better-informed, and more calibrated regulatory intervention instead of the disorganised response that unfortunately ensued.”
Fintech firms should not be afraid of regulators. Quite the opposite: close collaboration is key. The right conversations at the right time can transform your prospects and bring funding to the table.
Inside, not outside
At one time cryptocurrency was content to exist outside the financial mainstream. Its anonymity made it a pariah, its volatility a joke, a bogeyman to scare financial advisers and bring them out in a sweat late at night.
But this scrappy outsider is changing its ways. The market is maturing. It was unthinkable 10 years ago that Bitcoin could become a stalwart of the financial system. But here we are.
What was once underground is now mainstream.
Perhaps related is the fact that the US Security and Exchange Commission’s Office of Compliance Inspections and Examinations has ramped up investigations by 10% year-on year and marked out digital asset broker-dealers, exchanges and traders for special attention in its 2019 priorities list.
Where once large investors saw only risk in digital assets, they now see opportunity. These are pension funds and hedge funds, those whose job it is to allocate assets for millionaires and billionaires, and who control the future purchasing power of entire populations.
Dow’s Marketwatch explains how institutional investors are now bullish on crypto, backed by record highs in the Bitcoin futures market.
When the owner of the New York Stock Exchange launched digital asset exchange Bakkt in 2018, the veil was lifted and the idea that cryptocurrency would be relegated to a mere sideshow ended. Bakkt will begin testing its Bitcoin futures and custody in July 2019.
Interdealer broker, ICAP, is entering Bitcoin derivatives, too. This $568 million-a-year revenue business looks after trades for investment banks and large asset managers.
Speaking to Bloomberg, the joint head of digital asset markets Duncan Trenholme admitted: “Every institution is on an educational journey. Many are exploring how tokens can legitimately be traded or stored and I’d expect more projects to hit the market over the next year or two.”
Note that key word. Legitimately. Within the rules.
The question we face is not whether regulation is necessary for digital assets, but how digital asset businesses can best work with regulators.
Looking forward
Securing the correct licence can transform the value of fintech assets. Working within the system and fulfilling compliance obligations is costly, sure. In fact, regulatory costs for financial institutions could double in the next decade.
But financial regulators can open massive markets for the best fintech products. Some economies, like South Korea, have recognised the industry’s huge potential but aspects of regulation like cryptocurrency taxation still exist in a legal grey area.
Others, like India, are moving to follow a shadow banking ban for cryptocurrency firms with an incredible 10-year jail sentence for trading in digital assets. Large Indian crypto-exchanges like Zebpay and Coinome, have been forced to shut their doors in such a harsh and uncertain regulatory environment.
At the same time, one of India’s largest and most powerful tech lobbies is trying to make the case to the central bank for legalisation and regulation. These conversations are vital.
Maxim Bederov
One example we should all watch closely is that of Switzerland’s SIX exchange. It became the first in the world to debut an exchange traded product for cryptocurrency. Now, the Amun Crypto Basket, tracking the prices of Bitcoin and Ethereum, sits happily alongside exchange-traded products (ETPs) for gold, oil, silver and other traditional commodities.
Amun had a keen eye for regulatory standards and is reaping the rewards. It should come as no surprise that the most recent ETPs listed on SIX are all by Amun. Single-asset funds for Ripple and Ethereum arrived in 2019, for example. By contrast the last new traditional commodity ETPs debuted way back in 2013.
This is fintech working at its best, disrupting the market with the regulator’s backing, attracting institutions and setting the new standard for investment.
By Maxim Bederov
* More Details Here
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The XTRD Megathread

What is XTRD?

XTRD is a technology company that are introducing a new infrastructure that would allow banks, hedge funds, and large institutional traders to easily access cryptocurrency markets.
XTRD is launching three separate products in sequential stages to solve the ongoing problems caused by having so many disparate markets. Firstly a unified FIX API followed by XTRD Dark Pools and finally the XTRD Single Point of Access or SPA.
Our goal is to build trading infrastructure in the cyptospace and become one of the first full service shops in the cryptocurrency markets for large traders and funds.

What are the industry issues?

COMPLEX WEB OF EXCHANGES. A combination of differing KYC policies, means of funding, interfaces and APIs results in a fragmented patchwork of liquidity for cryptocurrencies. Trading in an automated fashion with full awareness of best pricing and current liquidity necessitates the opening and use of accounts on multiple exchanges, coding to multiple API’s, following varying funding and withdrawal procedures. Once those hurdles are cleared, market participants must convert fiat currency to BTC or ETH and then forward the ETH on to an exchange that may not accept fiat, necessitating yet another transaction to convert back to fiat. Major concerns for market participants range from unmitigated slippage and counterparty risk to hacking prevention and liquidity.
HIGH FEES. Execution costs are even more of a factor. Typical exchange commissions are in the 0.1% – 0.25% range per transaction (10 to 25 basis points), but the effective fees are much higher when taking into bid and ask spreads maintained by the exchanges. As most exchanges are unregulated, there is generally no central authority or regulator to examine internal exchange orders that separate proprietary activity from customer activity and ensure fair pricing.
THIN LIQUIDITY. A large institutional order, representing a sizable percentage of daily volume can move the market for a product, and related products in an exchange by a factor of 5-10%. That means a single order to buy $1,000,000 worth of bitcoin can cost an extra $50,000-$100,000 per transaction given a lack of liquidity if not managed correctly and executed on only one exchange. By way of comparison, similar trades on FX exchanges barely move markets a fraction of a percent; those price changes cost traders money, and deter investment.

What are the XTRD solutions?

An API is an “Application Programming Interface”, a set of rules that computer programs use to communicate. FIX stands for “Financial Information eXchange”, the API standard used by most financial organizations as the intermediary protocol to communicate amongst disparate systems such as market data, execution, trade reporting, and order entry for the past 25 years.XTRD is fixing the problem of having 100 different APIs for 100 exchanges by creating a single FIX based API for market data and execution – the same FIX API that all current financial institutions utilize.XTRD will leverage our data center presences in DC3 Chicago and NY4 New Jersey to host FIX trading clients and reduce their trading latencies to single milliseconds, a time acceleration of 100x when it comes to execution vs internet. More infrastructure and private worldwide internet lines will be added in 2018 and beyond to enable secure, low latency execution for all XTRD clients, FIX and PRO.
XTRD PRO is a professional trading platform that will fix the basic problems with trading across crypto exchanges – the need to open multiple web pages, having to click around multiple windows, only being able to use basic order types, and not seeing all your positions, trades, and market data in one place.XTRD PRO will be standalone, downloadable, robust end-to-end encrypted software that will consolidate all market data from exchanges visually into one order book, provide a consolidated position and order view across all your exchange accounts, and enable client side orders not available on exchanges – keyboard macro shortcuts, VWAP/TWAP, shaving the bid and offer, hit through 1% of the inside, reserve orders that bid 100 but show 1, SMART order routing to best exchange and intelligent order splicing across exchanges based on execution costs net of fees, OCO and OTO, many others.
XTRD SPA is the solution to bridge cross-exchange liquidity issues. XTRD is creating Joint Venture partnerships with trusted cryptocurrency exchanges to provide clients on those exchanges execution across other exchanges where they do not have accounts by leveraging XTRD’s liquidity pools.An order placed by a client at CEX.IO, XTRD’s first JV partner, can be executed by XTRD at a different exchange where there may be a better price or higher liquidity for a digital asset. Subsequently, XTRD will deliver the position to CEX.IO and then CEX.IO will deliver the execution to the client, with XTRD acting as just another market participant at the CEX.IO exchange.XTRD does not take custody of funds, we are a technology partner with exchanges. All local exchange rules, procedures, and AML/KYC policies apply.
Institutions and large market participants who have large orders of 100 BTC or more generally must execute across multiple markets, increasing their counterparty risk, paying enormous commissions and spreads, and generally having to deal with the vagaries of the crypto space. Alternatives are OTC brokers that charge multiple percents or private peer-to-peer swaps which are difficult to effectuate unless one is deeply in the space.XTRD is launching XTRD DARK – a dark liquidity pool to trade crypto vs fiat that matches buyers and sellers of large orders, discreetly and anonymously, at a much lower cost. Liquidity is not displayed so large orders do not move thin markets as they would publicly. The liquidity will come from direct XTRD DARK participants as well as aggregation of retail order flow into block orders, XTRD’s own liquidity pools, connections with decentralized exchanges to effectuate liquidity swaps, and OTC broker order flow.XTRD is partnering with a fiat banking providebroker dealer to onboard all XTRD DARK participants for the fiat currency custody side with full KYC/AML procedures.

XTRD Tokenomics

Who is XTRD intended for?

XTRD is mainly aimed at major institutions, hedge funds, algorithmic traders who are currently unable to enter the crypto markets.
These firms include companies such as Divisa Capital run by XTRD Advisor Mushegh Tovmasyan.

XTRD Weekly Updates

Upcoming Events


Further AMA's will be coming soon!

XTRD In The Media


More information will be added to this thread as the project develops.
We are currently looking for key community members to assist in building out this thread.
If you are interested please email [[email protected]](mailto:[email protected])
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CFTC Approves Physically Settled Bitcoin Futures And Ripple XRP Bitcoin classified as a commodity by CFTC On Colored Coins, and how Counterparty within Bitcoin, and Ethereum, Nxt, etc. work Trump + CFTC Killed Bitcoin - Tesla / Dave Kranzler - No Volume Bitcoin Price PUSHING UP!!  Momentum Still Strong?  CFTC Chairman The

REGULATION OF BITCOIN: THE ROLE OF THE CFTC The remarkable growth and volatility of Bitcoin and other virtual currencies has raised the question of how these markets are regulated. The CFTC has emerged as "the federal overseer of digital currencies like bitcoin," according to Bloomberg.1 Other federal regulators, such as the SEC and bank regulators, supervise specific institutions and discrete ... [1] Specifically, CFTC regulation 45.8 provides that “if both counterparties to a swap are non-SD/MSP counterparties [i.e., non-swap dealers or major swap participants] and only one counterparty is a U.S. person, that counterparty shall be the reporting counterparty.” [2] CFTC Letter No. 13-10, “Time-Limited No-Action Relief for Swap Counterparties That Are Not Swap Dealers or Major Swap ... CFTC Part 20 Reporting (Large Trader Reporting for Physical Commodity Swaps) Since November 21, 2011, market participants have been required to comply with the CFTC final Part 20 regulations regarding large trade requirements for cleared swaps. Date Description View; 11 Sep 2020: Commodity Evening Report: 11 Sep 2020: Commodity Morning Report: 10 Sep 2020: Commodity Evening Report: 09 Sep 2020 ... Bitcoin Futures and Options Contracts and Digital Asset Delivery Rules Bitnomial Submission No. 20-001 Dear Mr. Kirkpatrick: Bitnomial Exchange, LLC. (³Bitnomial´ ³Exchange´) heeb QRWLfeV Whe CPPdW FXWeV Tadg CPLVVL (CFTC´ ³CPLVVLRQ´) WhaW LW LV VeOf-certifying the initial listing of the Bitcoin US Dollar Futures, Deci Bitcoin US Dollar Futures and Options on US Bitcoin Dollar Futures ... The new NFA reporting requirements and the CFTC’s Proposed Interpretation with respect to virtual currency reflect increasing regulator concern about this burgeoning product area. That should ...

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CFTC Approves Physically Settled Bitcoin Futures And Ripple XRP

bitcoin: capitulation next? OR BULL MARKET? ️LIVE Crypto Analysis TA & BTC Cryptocurrency Price News - Duration: 27:23. Crypto Kirby Trading 14,912 views Much fear and uncertainty was removed today after the SEC & CFTC Bitcoin & Cryptocurrency Hearings Bitcoin has been classified as a commodity by the CFTC. This further legitimizes bitcoin as a tradable asset on the global stage. Here is the video link to get $50 of bitcoin for FREE. https://www ... Head of the CFTC commenting on Bitcoin. Mike Alden. Loading... Unsubscribe from Mike Alden? ... Sign in to report inappropriate content. Sign in. Transcript; Add translations. 128 views. 5. Like ... Bitcoin Technical Analysis & Bitcoin News Today: I'll use technical analysis on the Bitcoin price to make a Bitcoin price prediction. Watch the video to learn more! Watch the video to learn more!