CFTC headquarters. Photo credit: Diego Radzinschi.

The U.S. Commodity Futures Trading Commission has met with more than 100 fintech companies in recent months as part of an effort to share information and get feedback from these companies. And according to one of the CFTC's top officials handling fintech, it is ready to move forward with the industry in other ways too.

The commission's Daniel Gorfine, chief innovation officer and director of the fintech initiative dubbed LabCFTC, gave an update this past week on what's next for its work with fintech companies.

“There is little doubt that fintech innovation has the potential to—and already is—benefiting the American public,” Gorfine said, during a keynote address Oct. 19 at the FIA Futures and Options Expo in Chicago. “Whether through increased efficiency, lower transaction costs, or improved access, our society stands to improve based on such innovation.”

Gorfine mentioned in his remarks how distributed ledger and blockchain technologies “hold promise in transforming clearing and settlement processes,” as do smart contracts, the cloud and machine learning.

“These innovations are not without their risks, however,” said Gorfine, who moved to the CFTC in July after serving as an associate GC with fintech startup OnDeck.

“The disintermediation of traditional actors or their functions will strain rules written for a different, analog era,” he said. “Proper recognition of new actors in markets will necessitate regulatory consideration, though always with the careful balance of not prematurely stemming innovation. New hazards will emerge, whether around data security and cyber security, questions regarding governance and accountability, or risks around new asset classes, including those in the virtual realm.”

Gorfine named five areas in which LabCFTC has activities scheduled around fintech.

LabCFTC has held office hour sessions with fintech companies in New York, Washington, D.C., and Chicago. The commission has plans to visit Silicon Valley, Austin and Boston in coming months, Gorfine said, noting that the CFTC has so far met with more than 100 companies and will release an annual white paper with “aggregated learnings.”

“This form of engagement is our bread and butter, and the mechanism that provides us with the knowledge, questions and insights that drive our broader work,” he said.

The commission also released its first “LabCFTC Primer” about virtual currencies, which explains the CFTC's role in oversight.

The CFTC will also hold competitions for fintechs beginning in 2018 under the Science Prize Competition Act. The competitions could touch on a number of topics, Gorfine said, including novel ways to use or share data, make CFTC rules machine readable or build a “smart notice-and-comment platform.”

The CFTC's Technology Advisory Committee has re-formed, and Gorfine has been selected as the designated federal officer. Industry leaders will be involved with the committee to “make recommendations to the CFTC regarding technological innovations and advances.”

CFTC headquarters. Photo credit: Diego Radzinschi.

The U.S. Commodity Futures Trading Commission has met with more than 100 fintech companies in recent months as part of an effort to share information and get feedback from these companies. And according to one of the CFTC's top officials handling fintech, it is ready to move forward with the industry in other ways too.

The commission's Daniel Gorfine, chief innovation officer and director of the fintech initiative dubbed LabCFTC, gave an update this past week on what's next for its work with fintech companies.

“There is little doubt that fintech innovation has the potential to—and already is—benefiting the American public,” Gorfine said, during a keynote address Oct. 19 at the FIA Futures and Options Expo in Chicago. “Whether through increased efficiency, lower transaction costs, or improved access, our society stands to improve based on such innovation.”

Gorfine mentioned in his remarks how distributed ledger and blockchain technologies “hold promise in transforming clearing and settlement processes,” as do smart contracts, the cloud and machine learning.

“These innovations are not without their risks, however,” said Gorfine, who moved to the CFTC in July after serving as an associate GC with fintech startup OnDeck.

“The disintermediation of traditional actors or their functions will strain rules written for a different, analog era,” he said. “Proper recognition of new actors in markets will necessitate regulatory consideration, though always with the careful balance of not prematurely stemming innovation. New hazards will emerge, whether around data security and cyber security, questions regarding governance and accountability, or risks around new asset classes, including those in the virtual realm.”

Gorfine named five areas in which LabCFTC has activities scheduled around fintech.

LabCFTC has held office hour sessions with fintech companies in New York, Washington, D.C., and Chicago. The commission has plans to visit Silicon Valley, Austin and Boston in coming months, Gorfine said, noting that the CFTC has so far met with more than 100 companies and will release an annual white paper with “aggregated learnings.”

“This form of engagement is our bread and butter, and the mechanism that provides us with the knowledge, questions and insights that drive our broader work,” he said.

The commission also released its first “LabCFTC Primer” about virtual currencies, which explains the CFTC's role in oversight.

The CFTC will also hold competitions for fintechs beginning in 2018 under the Science Prize Competition Act. The competitions could touch on a number of topics, Gorfine said, including novel ways to use or share data, make CFTC rules machine readable or build a “smart notice-and-comment platform.”

The CFTC's Technology Advisory Committee has re-formed, and Gorfine has been selected as the designated federal officer. Industry leaders will be involved with the committee to “make recommendations to the CFTC regarding technological innovations and advances.”