US regulators team up with UK FCA for global fintech sandbox

Financial industry regulators in the United States have joined U.K. top watchdog’s global financial technology sandbox. The U.S. Commodities Futures Trading Commission (CFTC), the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation (FDIC), and the Securities and Exchange Commission (SEC) joined the initiative that seeks to identify the opportunities, challenges and risks facing the fintech industry.

In a joint release, the regulators announced that they had joined the Global Financial Innovation Network (GFIN), a global network with over 50 members that’s committed to supporting financial innovation in the interests of consumers. The network was formed in January this year by the U.K.’s Financial Conduct Authority (FCA) and other regulators.

U.S. regulators have been seeking for ways to offer regulatory clarity for all the stakeholders and to identify the opportunities and challenges in the fintech industry, the statement said. By joining GFIN, they will enhance their ability to perform their roles.

“Participation in the GFIN furthers these objectives and enhances the agencies’ abilities to encourage responsible innovation in the financial services industry in the United States and abroad. By promoting knowledge-sharing on innovation in financial services, U.S. members of GFIN will seek to advance financial and market integrity, consumer and investor protection, financial inclusion, competition, and financial stability.”

In a separate event, the CFTC revealed that it had upgraded its fintech and blockchain research lab to a fully-fledged office. Known as LabCFTC, the lab has been the regulator’s research wing, delving into emerging fintech including cryptocurrencies. The lab has been under the supervision of the Office of the General Counsel since it was formed two years ago, but it will now report directly to CFTC’s chairman, Heath Tarbert.

In a statement to CoinDesk, Tarbert stated, “I want the agency to be the resource for you to help identify ways those technologies could fit into the current regulatory structure. Now that LabCFTC’s success has been demonstrated, we want to solidify its position within the agency. Now it will take on an even bigger role here at the CFTC and be a critical link to innovators for years, and perhaps decades, to come.”

The regulator has continued to perform its mandate of protecting the investors against fraud, recently cracking down on a Nevada-based crypto Ponzi scheme. The CFTC alleged that Circle Society Corp. had defrauded its investors of $11 million in an extensive scheme that started in 2017.