Investment managers and fintech providers in the crypto space should take note of two recent Commodity Futures Trading Commission (“CFTC”) regulatory developments.
First, in late-August, the CFTC issued a consent order determining that a trade signal aggregator improperly failed to register as a commodity trading advisor (“CTA”). As its name suggests, a trade signal aggregator is a service provider that aggregates trade signals generated by third parties. Historically, this type of service provider has not been subject to CTA registration, provided that it was not “directing” a customer’s trade account. (Generally, a party directs a customer’s trading account when it is authorized to cause a transaction to be effected for the customer’s account with the customer’s specific authorization.)