Virtual Currency Rules: In October, the NFA adopted an Interpretive Notice entitled Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities. The Interpretive Notice establishes disclosure requirements for FCM, IBs, CPOs and CTAs that engage in activities related to virtual currencies or virtual currency derivatives.
- FCM and IB Members must provide advisories to customers at or before the time they trade a virtual currency derivative with or through the member. They also are also required to provide these advisories to any customer that has traded a virtual currency derivative prior to the effective date by Nov. 30, 2018.
- If an FCM or IB Member engages in any type of spot market virtual currency activity with a customer or counterparty on or after Oct. 31, 2018, the member must provide the standardized disclosure language in the manner described in the Interpretive Notice and must also prominently display the disclosure language in any of its promotional material related to spot market virtual currencies.
- CPO and CTA members must provide investors with robust disclosures related to their investor activities in spot market virtual currencies and virtual currency derivatives. In addition, CPO and CTA members must provide standardized disclosure language addressing the limits of NFA’s oversight with respect to spot market virtual currencies. The rule also covers requirements with promotional materials, disclosure documents, offering documents and notices to prospective investors.
If you have any cryptocurrency questions, please call Mike Coglianese at 630-461-5841 or email Mike@cogcpa.com.