NFA Updates Digital Asset Commodity Requirements

The National Futures Association ("NFA") repealed an Interpretive Notice and amended compliance requirements concerning digital asset commodities.

According to the Notice, the 2018 Interpretive Notice 9073 imposed disclosures regarding certain specific risks and required disclosure of NFA's lack of jurisdiction over spot digital commodity activities.

The NFA stated that the 2023 adoption of Compliance Rule 2-51 ("Requirements For Members and Associates Engaged in Activities Involving Digital Asset Commodities")—which established anti-fraud, supervision, and just and equitable principles of trade for activities involving Bitcoin and Ether—rendered the 2018 Notice inaccurate. (See previous coverage.) The NFA adopted amendments to Rule 2-51 to clarify that it now covers "any digital asset commodity that has a related commodity interest product certified by a registered entity or approved by the CFTC for listing." The NFA explained that this definition broadens the scope of the Rule and mitigates the need for future amendments to specifically identify new products.

The NFA said the amendments are effective immediately.