CFTC Chair J. Christopher Giancarlo testified before the House Agriculture Committee on developments related to enforcement, FinTech, market oversight and recent rulemaking initiatives.
At the hearing, Mr. Giancarlo outlined efforts to police fraud, market manipulation and the illegal trading of virtual currencies. He noted that the CFTC filed 13 manipulative conduct cases in 2018 – the most manipulation cases ever filed in a single year – and granted the largest whistleblower award to date ($30 million).
As to virtual currencies, Mr. Giancarlo described the agency's work in learning more about how investments are made using new technologies. He underscored the importance of the CFTC's Customer Advisories, which are intended to provide customers with a more robust understanding of how virtual currencies function. Mr. Giancarlo also expressed support for a bill sponsored by Representative Austin Scott (R-GA) that would expand the CFTC's authority to collaborate with FinTech developers on projects concerning emerging financial and compliance technologies.
In addition, Mr. Giancarlo reported that the CFTC expects the number of derivatives clearing organizations to increase in 2019. He added, however, that the CFTC (i) must improve its ability to "monitor systemic risk in the derivatives market" and (ii) should look to enhance its internal cybersecurity defenses to protect market data that the agency collects.
Mr. Giancarlo noted that recent amendments to the Volcker Rule will provide banking institutions – including swap dealers, future commission merchants, and commodity pools – with a better understanding of permitted activities. As for the de minimis threshold, he stated that leaving the threshold at the $8 billion level would permit firms to avoid incurring new compliance-related costs.
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