CTAs, Trading Signals, and DeFi: Connecting Dots or Unconnected Leaps of Logic?
Investment managers and fintech providers in the crypto space should take note of two recent Commodity Futures Trading Commission (“CFTC”) regulatory developments.
First, in late-August, the CFTC issued a consent order determining that a trade signal aggregator improperly failed to register as a commodity trading advisor (“CTA”). As its name suggests, a trade signal aggregator is a service provider that aggregates trade signals generated by third parties. Historically, this type of service provider has not been subject to CTA registration, provided that it was not “directing” a customer’s trade account. (Generally, a party directs a customer’s trading account when it is authorized to cause a transaction to be effected for the customer’s account with the customer’s specific authorization.)
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