The US proposed to oblige hedge funds to report cryptocurrency risks

If the proposal is adopted, the obligations would affect only companies with more than $500 million in assets under management

11.08.2022 - 15:20

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2 min

What’s new? The Commodity Futures Trading Commission (CFTC) along with the U.S. Securities and Exchange Commission (SEC) submitted a proposal that would require hedge funds with over $500 million in assets under management (AUM) to report digital asset risks. Crypto funds will not have to publicly disclose information: they will report to regulators on Form PF. The proposal is currently out for public discussion.

Information on the CFTC website

What is the essence of the initiative? The new rule would allow the Financial Stability Oversight Council (FSOC) to more effectively monitor systemic threats, as well as strengthen oversight of private fund advisers. CFTC Commissioner Christy Goldsmith Romero said the regulator's goal is to make the data collected more useful and to ensure that hedge funds provide the risk disclosures that Congress intended.

Statement by Christy Goldsmith Romero

The proposal was not supported by Commissioner Caroline Pham. She noted that the amendments impose excessively broad burdensome obligations on funds. She said the CFTC should be more cautious when considering proposals that could negatively impact economic activity.

Statement by Caroline Pham

The CFTC intends to consider public comments on the proposed changes.

Earlier, US Senate members Debbie Stabenow and John Boozman introduced a bill that would give the CFTC authority to oversee the cryptocurrency market. If approved, digital assets would be regulated as commodities rather than securities, and cryptocurrency companies would be required to register with the CFTC.

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