Updated: March 20, 2024, 5:26 PM EDT
Dogecoin viceroy
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On March 7, in three separate letters to the Commodity Futures Trading Commission (CFTC), the cryptocurrency exchange announced its intention to launch monthly cash-settled futures contracts. Dogecoin, Litecoin and bitcoin cash. This communication, addressed to CFTC Secretary Christopher Kirkpatrick, details the proposed contract size, settlement method (utilizing benchmark interest rates based on market vectors), and structure.
Coinbase emphasized in the letter that it is utilizing its own certification route under CFTC Rule 40.2(a) to list futures contracts. This process allows exchanges to launch new products without waiting for direct approval from the CFTC if they confirm that the products comply with the Commodity Exchange Act and CFTC regulations.
Considering that all three cryptocurrencies are derived from Bitcoin, which has been recognized as a commodity by the Securities and Exchange Commission, their classification raises interesting regulatory issues. Bloomberg Intelligence ETF Research Analyst James Seyffart Posted on X.com“Interesting… I wonder if the SEC objects to their classification as ‘commodity futures’ and ‘securities futures’. Considering its origins in Bitcoin, especially after the approval of the spot #Bitcoin ETF, it would be difficult to claim that it is a security. “It will be difficult. Coinbase’s choice may be strategic.”
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About the author
Lawrence Lewitinn is The Block’s North American editor-in-chief. Lewitinn has extensive experience as a financial journalist, working at CoinDesk, CNBC, TheStreet, Yahoo Finance, Observer, and Modern Consensus. His experience also includes several years on Wall Street trading bonds, currencies and commodities for Millennium Management and MQS Capital. Lewitinn graduated from New York University, received an MBA from Columbia Business School, and a master’s degree in international relations from Columbia School of International and Public Affairs. He is a CFA Charterholder.