Author: Jacob Shipkevich

CFTC Seeking for Federal Resources to Oversee Trading Involved with Blockchain Technology

Washington, D.C. – In a Congressional testimony, the US Commodity Futures Trading Commission (CFTC) intimated an increase of the agency’s budget to oversee trading involved with blockchain technology.

An additional $31 million needed

On June 8, CFTC’s Acting-Chairman, J. Christopher Giancarlo, testified before the Congressional Committee on Appropriations Subcommittee on Agriculture, Rural Development and Related Agencies. The agency suggests an additional $31 million funding is necessary for the CFTC to oversee the functions on blockchain technologies.

This amount will be appropriated accordingly to supervise activities of the blockchain-related market.

FinTech and Blockchain

With the rise of innovation in the financial technology (FinTech) industry, federal financial agencies are in need to revamp their oversight. Earlier this year, President Trump issued an Executive Order that created the American Technology Council. President Trump touted that Government and its agencies should implement efficient information technologies to render more effective oversights and services.

CFTC’s Acting-Chairman Giancarlo testified that a boost in federal funding will aid the agency in implementing FinTech effectually. Giancarlo pointed out that with these new technologies CFTC will become a more effective regulator. Moreover, these technologies will allow the agency to modernize its current regulations.

Later in his testimony, Acting-Chairman Giancarlo mentioned the innovation of “smart” contracts and distributed ledger technology, both of which are in their nascent stages. Their implementations will ostensibly challenge and change conventional methods of our current financial market infrastructure. Hence, Giancarlo finds it important to take an early initiative to prepare CFTC for such modifications.

Other Agencies

There are other federal agencies requesting additional funding to oversee activities in the financial technology industry. The FBI is asking for $21 million and 80 new employees for such purposes. After recent reports of ransomware and other cybercriminal complaints regarding financial-related activities, resources are needed to deter further damage.

 

Giancarlo’s Testimony: http://www.cftc.gov/PressRoom/SpeechesTestimony/opagiancarlo-24

CFTC Banned David Liew from Trading

Washington, DC – Earlier this June, the U.S. Commodity Futures Trading Commission (CFTC) charged David Liew for illegal practices in the precious metals futures contracts. CFTC banned David Liew from trading, because of preceding events of manipulating the gold and silver markets. As a junior trader, on the precious metals desk, in a large financial institution, Deutche Bank, Liew was engaging in these unlawful acts for at least two years, from 2009 to 2012.

David Liew’s Machinations

Liew mentioned that he conspired to manipulate prices with other unidentified people. One of them Liew referred to as “The Legend.” The scheme involved placing and quickly pulling out small orders, forcing prices to benefit traders who needed to fill client orders. Liew admitted to placing the fraudulent spoof orders with a hope of having the market interest in trading become larger than what it was in reality. Through the spoof orders, Liew’s resting orders were filled. This duplicitous scheme allowed traders to buy metal futures contracts at exaggeratedly low prices and sell them at artificially high prices.

CFTC’s Investigation

CFTC issued an order filing to which David Liew pleaded guilty to connive to fraudulent charges. Liew is agreeing to cooperate as his preceding actions transgressed the Commission Regulations and Commodity Exchange Act (CEA). Moreover, CFTC banned David Liew from trading and obliged him to perpetually never to participate in other similar commodity-interest activities such as seeking registration, or acting as an agent obliged to be registered.

During the Division of Enforcement’s (Division) investigation, Liew was compliant. CFTC recognized Liew’s cooperation in that process, which included rendering of essential assistance to the investigation and cooperating with any other agencies involved in this investigation.

CFTC’s Director of Enforcement, James McDonald, asserted that the enforcement action indicated that the Commission will be more vigilant and be more stringent with “individuals who manipulate and spoof” the markets. He also said, “the Commission will give meaningful cooperation credit to those who acknowledge their own wrongdoing, enter into a Cooperation Agreement and provide substantial assistance to the Division in its investigations and enforcement actions against others who have engaged in illegal conduct.”

CFTC’s Order: http:[email protected]/documents/legalpleading/enfdavidlieworder060217.pdf