Mod, please move to another section if more appropriate. https://www.cftc.gov/PressRoom/SpeechesTestimony/opabehnam7 [Below is just an excerpt as there are other sections on the link above that discuss blockchain and virtual currencies] But virtual currencies may – will – become part of the economic practices of any country, anywhere. Let me repeat that:these currencies are not going away and they will proliferate to every economy and every part of the planet.Some places, small economies, may become dependent on virtual assets for survival.And, these currencies will be outside traditional monetary intermediaries, like government, banks, investors, ministries, or international organizations. We are witnessing a technological revolution. Perhaps we are witnessing a modern miracle. Regulation of Bitcoin Another example is regulation. In 2018, two exchanges self-certified several new contracts for futures products for virtual currencies.They will not be the only ones.There are those looking for capital formation and risk transfer.They include machine learning and artificial intelligence, algorithm-based trading, data analytics, “smart” contracts valuing themselves and calculating payments in real-time, and distributed ledger technologies, which over time may come to challenge traditional market infrastructure. They are transforming the world around us, and it is no surprise that these technologies are having an equally transformative impact on US capital and derivatives markets. Supporters of virtual currencies see a technological solution to the age-old “double spend” problem – that has always driven the need for a trusted, central authority to ensure that an entity is capable of, and does, engage in a valid transaction. Traditionally, there has been a need for a trusted intermediary – for example a bank or other financial institution – to serve as a gatekeeper for transactions and many economic activities. Virtual currencies seek to replace the need for a central authority or intermediary with a decentralized, rules-based and open consensus mechanism.Others, however, argue that this is all hype or technological alchemy and that the current interest in virtual currencies is overblown and resembles wishful thinking, a fever, even a mania.They have declared the 2017 heightened valuation of Bitcoin to be a bubble similar to the famous “Tulip Bubble” of the seventeenth century.They say that virtual currencies perform no socially useful function and, worse, can be used to evade laws or support illicit activity. Indeed, history has demonstrated to us time-and-again that bad actors will try to invoke the concept of innovation in order to perpetrate age-old fraudulent schemes on the public. In 2015, the CFTC determined that virtual currencies, such as Bitcoin, met the definition of “commodity” under the Commodity Exchange Act or “CEA,” our governing statute. Nevertheless, the CFTC does NOT have regulatory jurisdiction under the CEA over markets or platforms conducting cash or “spot” transactions in virtual currencies or other commodities or over participants on such platforms.More specifically, the CFTC does not have authority to conduct regulatory oversight over spot virtual currency platforms or other cash commodities, including imposing registration requirements, surveillance and monitoring, transaction reporting, compliance with personnel conduct standards, customer education, capital adequacy, trading system safeguards, cyber security examinations or other requirements.In fact, current law does not provide any U.S. Federal regulator with such regulatory oversight authority over spot virtual currency platforms operating in the United States or abroad. However, the CFTC does have enforcement jurisdiction to investigate fraud and manipulation in underlying virtual currency spot markets and, as appropriate, conduct civil enforcement actions where fraud or manipulation is found. In contrast to the spot markets, the CFTC does have both regulatory and enforcement jurisdiction under the CEA over derivatives on virtual currencies traded in the United States. This means that for derivatives on virtual currencies traded in U.S. markets, the CFTC conducts comprehensive regulatory oversight, including imposing registration requirements and compliance with a full range of requirements for trade practice and market surveillance, reporting and monitoring and standards for conduct, capital requirements and platform and system safeguards. The CFTC has been straightforward in asserting its area of statutory jurisdiction concerning virtual currencies derivatives. As early as 2014, former CFTC Chairman Timothy Massad discussed virtual currencies and potential CFTC oversight under the CEA.And as noted above, in 2015, the CFTC found virtual currencies to be a commodity.In that year, the agency took enforcement action to prohibit wash trading and prearranged trades on a virtual currency derivatives platform.In 2016, the CFTC took action against a Bitcoin futures exchange operating in the U.S. that failed to register with the agency.Last year, the CFTC issued proposed guidance on what is a derivative market and what is a spot market in the virtual currency context.The agency also issued warnings about valuations and volatility in spot virtual currency markets and launched an unprecedented consumer education effort. Under the CEA and Commission regulations and related guidance, exchanges have the responsibility to ensure that their Bitcoin futures products and their cash-settlement process are not readily susceptible to manipulation and the entity has sufficient capital to protect itself. The CFTC has the authority to ensure compliance. In addition, the CFTC has legal authority over virtual currency derivatives in support of anti-fraud and manipulation including enforcement authority in the underlying markets. Enforcement is another aspect of our response. In the past several weeks the CFTC has filed a series of civil enforcement actions against perpetrators of fraud and market abuse involving virtual currency. These actions and others to follow confirm that the CFTC, working closely with the SEC and other fellow financial enforcement agencies, will aggressively prosecute those who engage in fraud and manipulation of US markets for virtual currency. We need to think about how to make this work internationally! I wanted to add a comment about education. This is an important aspect of our work.We have a duty to educate the public, making them aware of the volatility, the temptations, the potential for fraud, and consequences of trading in virtual assets.This education should be undertaken on a large, perhaps unprecedented scale.