On June 22-23, Eventus co-hosted an event, Shining a Light on Digital Asset Markets 2021, with ADAM. One focus area was the institutional adoption of digital assets, with the need for regulatory clarity standing out as a consistent theme.
SEC Commissioner Peirce channeled that concern, stating, “My complaint has been that too much of the conversation at the Commission has flowed from enforcement action rather than being in a more constructive regulatory manner.”
CFTC Commissioner Stump, in discussing the balance between innovation and regulation said, “My view is that we should allow technology to develop with a focus on the potential, rather than with skepticism. We certainly have to apply some basic principles to ensure that the development isn’t running afoul of our regulatory mission but should not be uncomfortable; allowing market demand to drive development.”
But while some general uncertainty remains, we should all be clear on how the industry views market manipulation. Tom Nath, Chief Operating Officer at BitOoda, noted that one of the factors slowing institutional adoption is potential price manipulation. Further, Laura Morrison, Global Head of Listings at Cboe, and others reminded us that price manipulation continues to be a key concern in the approval of a Bitcoin ETF in the US.
When it comes to market manipulation and the need for trade surveillance in this space, no further regulatory clarity is necessary. For example, the NYDFS issued a 2018 memo titled “Guidance on Prevention of Market Manipulation and Other Wrongful Activity,” which laid out the need for relevant policies and procedures to identify manipulative behavior. Further, several industry associations offer guidance on Disruptive Trading Practices in their respective codes, including both ADAM and the Global DCA.
ViP: Eventus handles mission-critical trade surveillance, compliance and risk management for a wide range of clients. We meet the needs of the most sophisticated firms, and our unique view across asset classes and jurisdictions enables clients to implement best practices across the industry, especially within digital assets. We provide trade surveillance for many digital asset venues around the world, including two-thirds of the exchanges listed on CB Insights’ Blockchain 50 list. Key highlights that make Validus fit-for-purpose with digital asset venues include:
- Configurability and Scope: Validus is a highly customizable platform for trade surveillance, risk monitoring, anti-money laundering and transaction monitoring.
- Scalability: Validus handles clients that require daily message rates in the billions.
- Data: Validus can accept data from any file type as part of our ETL process.
- Run time: The platform runs 24/7 in real time, T+1 or a combination of both.
- Coverage: Validus natively covers multiple asset classes and global markets, enabling cross-market surveillance opportunities.
About Eventus Systems
Eventus Systems is a leading global provider of multi-asset class trade surveillance and market risk solutions. Its powerful, award-winning Validus platform is easy to deploy, customize and operate across equities, options, futures, foreign exchange (FX), fixed income and digital asset markets. Validus is proven in the most complex, high-volume and real-time environments of tier-1 banks, broker-dealers, futures commission merchants (FCMs), proprietary trading groups, market centers, buy-side institutions, energy and commodity trading firms, and regulators. The company’s rapidly growing client base relies on Validus and Eventus’ responsive support and product development teams to overcome its most pressing regulatory challenges. For more, visit www.eventus.com.