CFTC staff allow onchain records and tokenized customer-fund investments
Serguey Asael Shinder2 min readThree divisions of the US Commodity Futures Trading Commission released updated answers on 24 September to their frequently asked questions about crypto assets and blockchain technology. The FAQs were first published in March; the update adds four new questions and revises one, covering two subjects: investing customer funds in tokenized assets, and keeping regulatory records on a blockchain.
On customer funds, the new Q12 says a futures commission merchant or derivatives clearing organization may invest customer funds in tokenized forms of investments already permitted under Commission Regulation 1.25, provided it can show four things: the underlying asset is itself permitted; the token gives the holder legal and economic rights the same as, or functionally equivalent to, the traditional form; the investment meets all the rule's conditions on liquidity, concentration, maturity and instrument features; and the tokens are held with an acceptable depository. For tokenized government money market funds, staff also expect a written acknowledgment letter from the custodian. The FAQ repeats that FCMs still may not invest customer funds in payment stablecoins.
On records, Q13 and Q14 say the recordkeeping rules in Regulations 1.31 and 45.2 are technology neutral, so staff would not object to records kept on a blockchain if every requirement of the rules is met. Q15 adds that entities need not keep an offchain copy for that reason alone - but those using a public, permissionless network should have systems that let them produce records for the Commission even if the network or its block explorer is unavailable. The document notes that comment letters from dYdX Labs, the Blockchain Association and the Solana Policy Institute had raised these regulations.
What it means
These are staff views, not rules, and they carry that caveat in the document itself. But they answer practical questions firms had been asking, and the answers are specific. The tokenization answer does not widen what customer money can be invested in; it lets the same permitted assets be held in a new form, with the rights test doing the work of keeping the substance unchanged.
The records answer is the more novel one. Allowing a public blockchain as the system of record, while insisting the firm can still produce records during an outage, puts the resilience burden on the firm rather than the network - which is where a regulator would expect it.