US CFTC Berkovitz resigning
By Daniel Tyson
16:00, 9 September 2021
A Commissioner who helped guide the Commodities Future Trading Commission (CFTC) through its response to cryptocurrency is stepping down, 18 months before his term ends.
Commissioner Dan M Berkowitz resigned Thursday, effective 15 October.
In his resignation letter, the appointee of former President Donald Trump mentioned the CFTC’s response to the rise of cryptocurrency.
“As the CFTC gained responsibility over the swaps market, and new products like cryptocurrencies have emerged, the staff has worked diligently to expand its expertise and capabilities,” he wrote.
Blockchain
In June, Berkowitz expressed concern over blockchain-based forms of finance, arguing DeFi tries to erase financial institutions, which provide people a valuable service.
"DeFi" refers to decentralised finance, that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments. As of January 2021, approximately $20.5bn in cryptocurrency was invested in DeFi, compared to approximately $1bn at the beginning of 2020.
“A threshold question is whether the public will benefit from disrupting the current financial system that relies extensively on financial intermediaries. Supporters of DeFi argue that cutting out intermediaries offers consumers more control over their investments,” he said.
He told audience members at the Asset Management Derivatives Forum 2021, that “Intermediaries such as banks, exchanges, futures commission merchants, payment clearing facilities, and asset managers—such as many of you at this conference—have developed over the past two or three hundred years of modern banking and finance to reliably provide critical financial services to support the financial markets and the investing public.”
US swap markets
In Thursday’s announcement, he said recent CFTC decisions have helped the US swap markets with mandatory clearing and transparency trading standards, registering and regulating swap trades and reporting of comprehensive swap date reporting.
The result is a “more resilient, more transparent, more liquid, less susceptible to manipulation, and more cost-effective for end users. Our derivative markets are stronger than ever and as a result, our economy is stronger too.”
Leaving early
Berkowitz, a Democrat, was nominated by President Donald Trump on 24 April 2018. Four months later, he was unanimously confirmed by the US Senate to a five-year term expiring in April 2023.
The letter did not give a reason why Berkowitz was departing early, only stating, "To every thing there is a season, and now is a time for me to turn to other challenges."
There was no word on his replacement Thursday afternoon.
The CFTC is an independent US regulator of the US derivatives markets.
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