CFTC STAFF SAID CUSTOMER FUNDS CAN GO INTO TOKENIZED ASSETS AND BLOCKCHAIN CAN SATISFY RECORDKEEPING — THE INSTRUMENT IS AN UPDATE TO AN FAQ FIRST PUBLISHED MARCH 20 THAT EXPLAINS TWO STAFF LETTERS — NO COMMISSION VOTE

On September 24 the CFTC put out Release 9303-26. Three divisions, Market Participants, Market Oversight, and Clearing and Risk, updated a set of frequently asked questions to address investments of customer funds in tokenized forms of permitted investments and the use of blockchain technologies to satisfy a registrant’s recordkeeping requirements. Chairman Michael Selig said he was pleased to see staff update these frequently asked questions.

Count the layers in that sentence. The FAQs were first published on March 20. They exist to explain Staff Letter 25-39 on tokenized collateral and Staff Letter 26-05, a no-action position on digital assets accepted as margin. Today’s document is therefore an update to an explainer of two letters. Customer funds, which is the money a firm holds for people who are not the firm, can now sit in a token because a page of answers changed.

Two days ago this desk wrote that every instrument the chairman named was a staff letter, an FAQ, an advisory or a request for comment. Here is the next one, on schedule. The Senate left the Clarity Act for dead and the agencies did not pause for a week. Nothing here was voted by the Commission and nothing here was passed by Congress.

Hold on to what that means for the people whose money it is. A letter is withdrawn by the next set of staff. A no-action position is a promise not to sue, which is not the same thing as a right. The arrangement lasts exactly as long as the arrangement. Bitcoin’s rules did not change this week by anybody’s letter. At the time of this writing, bitcoin was $84,064.