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SEC and CFTC planning on proposal to push hedge firms to report their crypto holding in classified filings

As the US government looks for ways to control the cryptocurrency market, hedge funds are becoming the next likely target. This is particularly the case following the market crisis that occurred in 2022.

According to a report from the Wall Street Journal that was published on August 10, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are planning to spearhead a proposal that will require hedge funds to report their exposure to cryptocurrencies through a confidential filing that will be known as Form PF.

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are currently considering a more comprehensive set of regulatory proposals that would broaden the purview of the Form PF. One of these proposals would require hedge funds to report data related to cryptocurrencies.

The most recent regulation proposal from the two agencies requires hedge funds with over $500 million in net assets to give comprehensive details about their cryptocurrency investments. This report must include details on exposures, portfolio concentrations, and borrowing intentions.

Notably, the Form FP was first conceived in response to the financial crisis of 2008 with the intention of assisting in the identification of potential stability threats posed by private funds. These funds handle the money of affluent people and organisations.

The Securities and Exchange Commission (SEC) and the Federal Reserve will typically publish aggregated information on the private-funds business based on the submissions made under the form.

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have lately expanded their emphasis on the regulation of cryptocurrencies. The CFTC’s Form PF underlines, in part, their worries over the implications of very volatile market conditions.

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Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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