CFTC Updates Guidance on Tokenized Assets and Blockchain Recordkeeping
Quick Look
The US Commodity Futures Trading Commission updated its guidance to allow registered crypto-related entities to invest customer funds in tokenized assets if they grant equivalent legal and economic rights, and to use blockchain-based recordkeeping, following the Senate's failure to advance the CLARITY Act and signaling increased regulatory action in the absence of congressional action.
AI-generated summary
Why It Matters
The CFTC initially released guidance on tokenized assets in March 2024, which has now been updated to clarify conditions under which customer funds can be invested in tokenized forms and blockchain recordkeeping can be used.
The US Commodity Futures Trading Commission (CFTC) has updated its guidance on tokenized assets and using blockchain technology for recordkeeping.
In a Thursday notice, the CFTC said that it had updated information under its frequently asked questions on registered crypto-related entities.
The guidance originally released in March was updated to specify that authorized companies could invest customer funds in tokenized forms, provided “the tokenized form of the asset grants the holder legal and economic rights that are the same or functionally equivalent to the rights received by holders of the asset in its traditional form.” The regulator added that it “would not object” to companies utilizing blockchain-based recordkeeping under the new rules.
CFTC Chair Michael Selig said that the changes were part of efforts “to provide regulatory clarity for the crypto industry.”
The move came days after the US Senate failed to advance the Digital Asset Market Clarity (CLARITY) Act, a bill expected to provide clarification on the roles the CFTC and Securities and Exchange Commission (SEC) would have in overseeing digital assets.
With the failed cloture vote, many expect that Congress will not be able to pass crypto market structure before 2027, leading to regulators advancing their own policies through rulemaking. The CFTC has already submitted a crypto market regulation plan for the White House to review.
Echoing the commodities regulator, SEC Chair Paul Atkins said before the CLARITY vote that the agency was “ready, willing, and able” to propose rules on crypto in the absence of congressional action. The regulator proposed rules on “certain investment contracts involving crypto assets” in August.
What to Watch
AI outlook — possibilities, not facts
The CFTC will finalize and enforce its crypto market regulation plan after White House review.
Likely · Within months
The SEC will proceed with rulemaking on crypto assets similar to its August proposal on investment contracts.
Likely · Within months
Open Questions
- What specific tokenized assets qualify under the new guidance?
- How will the CFTC monitor compliance with the equivalent rights requirement?
- What is the timeline for the White House review of the CFTC's crypto market regulation plan?
