US CFTC Wants More Funding to Gather Resources to Assess Crypto

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by Benjamin Godfrey · 3 min read
US CFTC Wants More Funding to Gather Resources to Assess Crypto
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The Derivatives Clearing Organizations are expected to employ effective data-breach security in their operations given the growth in the use of various schemes by cybercriminals.

The US Commodity Futures Trading Commission (CFTC) is requesting more funding in its Fiscal Year 2023 budget in order to gather the right training resources to assess digital assets for the proper regulatory measures. The budget proposal, made through its Department of Enforcement (DOE), sheds light on the risk climate of digital assets with an emphasis on the fact that the number of Derivatives Clearing Organizations (DCOs) is increasing, as well as those utilizing digital assets.

The US CFTC is a major regulatory body that focuses on derivatives and the futures market. The commission is requesting a budget of “$33.8 million and 91 FTE to maintain current capabilities and expand examination activities to reduce market risk and support the safety and soundness” of the DCOs it currently oversees which sums up to a total of 10.

The Derivatives Clearing Organizations are expected to employ effective data-breach security in their operations given the growth in the use of various schemes by cyber criminals. These schemes, according to the CFTC include the use of brute force attacks, Distributed Denial of Service (DDoS) attacks launched from botnets and other compromised equipment, sophisticated social engineering efforts, and various other malware efforts and exploits.

The commodities regulator also said the DCOs under its watch make use of digital assets and also face an extra risk that must be contained.

“Each new digital asset operates differently and with its own specialized set of threat vectors which each carry its own unique set of risks that need to be identified, assessed, and then examined,” the document reads. “The Division is requesting additional training resources in the area of loss prevention and resources to analyze and assess new digital assets.”

US CFTC Budget Request Justification

Per one of the justifications for the budget request, the CFTC said it has a primary obligation, through the Department of Enforcement, to protect consumers from fraud and abuse, and in doing so, it must have what it needs to accurately interpret any data from consultants.

“The Commission must have adequate resources to review reports being issued by consultants, resources for training purposes to learn about the new technologies to protect the digital currency, and must have the staffing resources, including travel dollars, to examine the DCO,” said the report. “Resources for training are needed for the examiners in order to keep abreast of new digital assets that DCOs would like to clear, the accounting treatment for digital currencies, and new technologies used to defend against an intrusion.”

For the DCOs that make use of digital assets like Bitcoin (BTC) in their clearing activities, the CFTC has the infrastructure to monitor quite a few of these cryptocurrencies, however, it acknowledged that each token comes with its own uniqueness, and with more making it to the limelight, it needs to step up its surveillance capabilities in order to gain proper control of the market.

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.

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