CFTC Seeks Public Feedback to Learn More About Ethereum

The U.S. Commodity Futures Trading Commission (CFTC) has published a “Request for Input” (RFI) on Tuesday, seeking public feedback in an effort to learn more about Ethereum, the technology behind it, and the markets built up around it.

As indicated in the document, the CFTC has given 60 days from the date of RFI’s release for respondents to provide feedback, which can either be sent through the mail, email, or hand delivery.

According to the release:

“The CFTC expects the comments and information received will benefit LabCFTC, the CFTC’s FinTech initiative, and help to inform the Commission’s understanding of these emerging technologies.”

Explaining the impetus behind the initiative, the commission stated that the RFI was published to gather information that may potentially improve the agency’s oversight of the Ethereum market, as well as other crypto-related derivatives markets.

The CFTC went on adding that:

“The input from this request will advance the CFTC’s mission of ensuring the integrity of the derivatives markets as well as monitoring and reducing systemic risk by enhancing legal certainty in the markets. The RFI seeks to understand similarities and distinctions between certain virtual currencies, including here ether and bitcoin, as well as ether-specific opportunities, challenges, and risks.”

The agency has outlined 25 questions Ethereum’s proprietary digital currency and the network itself, which is further subdivided into the network’s function, the technology powering it, the firm’s governance, cybersecurity, and custody, as well as markets and oversight.

The document further delves into a number of prevailing issues and concerns among the community, including the network’s scalability, its forthcoming proof-of-stake launch, how the network is specifically utilized, and how the firm is conducting audits of its Ether deposits.

As one question inquires:

“How would the introduction of derivative contracts on ether potentially change or modify the incentive structures that underlie a proof-of-stake model?”

The next series of inquiries further investigates the Ether market’s potential impact on a derivatives market anchored on the network.

The RFI was released through the commission’s FinTech innovation group LabCFTC, the focal point for the regulator’s efforts to promote responsible financial technology innovation and fair competition.