Blockchain and cryptocurrencies: a cross-border conundrum

Abstract

Purpose To analyze the CFTC’s approach to regulating cryptocurrencies and blockchain technologies in light of their cross-border nature, limitations on the CFTC’s extraterritorial authority, and the CFTC’s prerogative to work cooperatively with foreign regulators. Design/methodology/approach Discusses the principles set forth in CFTC Chairman Christopher Giancarlo’s White Paper regarding cross-border swap regulation; analyzes the similar nature of cross-border issues arising from regulation of cryptocurrencies and blockchain technologies; examines regulations and guidance implemented by foreign authorities in the blockchain and cryptocurrency space; and assesses the limitations of the CFTC’s extraterritorial authority. Findings The principles set forth in Chairman Giancarlo’s White Paper regarding cross-border swap regulation apply equally to blockchain technologies and cryptocurrencies, and as such, the CFTC may wish to pursue an analogous approach to regulating cryptocurrencies and blockchain technologies. Practical implications The CFTC should exercise deference to and cooperate with foreign counterparts to regulate cryptocurrencies and blockchain technologies that traverse international borders, thereby avoiding overlapping and potentially conflicting regulation while fostering an innovative growth environment for emerging technologies. Originality/value In-depth analysis and insight from experienced professionals in the CFTC and cross-border investigations and enforcement space.