By Michael Pflueger Introduction After the collapse of the Bahamas-based cryptocurrency exchange, FTX, Congress has been under immense public pressure to pass legislation that regulates the digital asset industries.[1] As of right now, there is no specific agency designated to regulate digital assets. This led several departments to supervise the digital asset industries. With that in…
Tag: CFTC
Blockchain and Cryptocurrency in Murky Regulatory Waters
Blockchain, cryptocurrency, NFTs—what is it all? It all starts with distributed ledger.1 The distributed ledger is a virtual ledger (in common parlance, a record) that is shared across a network of computers. A copy of the ledger is on every computer across the network. Each block in a distributed ledger contains data that must be…
Updates to Credit Default Swap Terms: Too Little, Too Late?
Credit default swaps became notorious financial instruments and symbols of financial engineering run amok during the 2007-8 financial crisis. Once worth over $60 trillion a year, the credit default swap market has shrunk significantly, but it is still worth nearly $10 trillion a year.1 A credit default swap is a financial derivative contract that pays…
Cryptocurrency Regulation and Valuation
In January 2018, the justice minister of South Korea announced that the country would consider banning cryptocurrency exchanges amid concerns regarding rampant speculation driving the prices of several virtual currencies, including bitcoin, sky high.1 The news led to an extreme worldwide drop in the price of bitcoin, as investors tried to gauge the uncertainty of…
Imposing Market Maker Obligations on Liquidity Providers
The historical practice of stock exchanges providing specialists started on the floor of the New York Stock Exchange in 1872.1 Up through the twentieth century, these specialists operated as market makers, ensuring market participants had timely and fair access to trades.2 The specialists had an affirmative obligation, in good times and in bad, to provide liquidity…