SEC, CFTC propose amendments for large hedge fund crypto reporting

jointly established by the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) Proposed Modification of form PF.

The proposal seeks to distinguish between “digital assets” and “cash and cash equivalents” for large hedge funds to ensure more accurate reporting.

According to the proposal, a new sub-asset class should be created for digital asset reporting. This means that these companies will have to disclose their exposure to the cryptocurrency industry on an individual basis.

The proposal defined digital assets as assets issued through blockchain technology, including but not limited to coins, tokens, and virtual currencies.

Form PF is designed to help regulators identify systemic risks to economic stability.

The authorities noted that investments in digital assets are becoming more common, increasing the need to gather more information about the exposure of these funds to cryptocurrencies. The recent market crash has further highlighted the risk of market contagion.

Meanwhile, regulators are also seeking comment from the public on whether the terms “crypto assets” or “digital assets” should be used.

The regulator wrote:

“We consider these terms synonymous. We are proposing to align our terms and definitions with the SEC’s recent Digital Asset Statement, and such terms and definitions are We believe it provides a consistent understanding of the types of assets we are trying to address.”

Comments are due by October 11th.

US regulators are increasingly working towards regulating the crypto space. SEC Chairman Gary Gensler has repeatedly urged cryptocurrency companies to talk to the SEC while the CFTC tightens its scrutiny of the industry.

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