lily: hopefully we will see more guidance from the sec and cftc. hs, we have seen china and south korea ban these initial coin offerings. it seems like what is next would be more either guidance or regulation from u.s. regulators. emily: what about the other cryptocurrencies, bitcoin aside? we were talking about ethereum. what trends are we seeing across the spectrum? thoroughly -- lily: with all the different cryptocurrencies, just this year alone, more than $2 billion have flowed into the initial coin offering space. we are seeing more startup companies and more concern there might be fraud in the space, which is why i think regulators are starting to crack down. emily: lily katz, thanks so much for stopping by. that does it for this edition of "bloomberg technology." tuesday, i will be reporting from the vanity fair new establishment summit. we will be on bloomberg all day with a great lineup of guests. including bob iger. reminder, we are live streaming on twitter. check us out weekdays, 5:00 in new york, 2:00 in san francisco. that is all for n

what more do we know about what the cftc is looking into? er with a list of questions asking for more information about the flash crash in june. we know they have asked about back upial -- let me and explain what happened during the flash crash. there was a big $12.5 million trade. that triggered all of these cascading sell orders. within 45 milliseconds, the price lunged -- plunged. the cftc is asking coinbase for more information about the initial $12.5 million trade as well as about margin trading which is something coinbase used to offer as an option. margin trading is when you borrow money to buy or sell more of an asset than you might otherwise be able to. coinbase has suspended that option. those are two by the things we know cftc is asking coinbase for more information about. emily: what do we know about how coinbase is currently regulated? >> coinbase is currently regulated three patchwork system of state regulations. they have licenses in a few dozen difference states as well as puerto rico. they are not currently regulated by the c

some should be regulated by the sec and some should be regulated by the cftc the commodities exchange. and other thing that we see going on from a regulatory point of view is a fear on the part of regulators in the developed world they're going to prevent innovation so they're stepping lightly. >> what do you say to the investors when they look at the volatility what is it a thousand or so all the way close to 6,000 in the span of nine or ten months. not the first very dramatic swing up or down. it's happened. you don't think that's going to end any time soon. >> as i mentioned, we've sized it. it's about a hundred billion for bitcoin. that is a very small market right now. it's captured a lot of people's imaginations. we are going to go through hypes and then shakeouts. hypes and shakeouts. there will be regulatory news, there will be hacks. all of these things have already happened. we call this anti-fragile. it's being battle tested almost every day. china banning it, russia bang it. this is all tests bit has gone through and it dips and comes back. >> it's resill yept at least in

it will take a lot of time. , they example, the cftc allowed one group to be a a derivative-- clearingion, it took them two years to educate. to blocken it comes chain technology, what is the regulator he outlook? what does it mean for banks? >> the federal reserve and the the regulators in the united states will take a look at block chain and it will fall under their payment systems methodologies. they will use existing regulations. the thing with the federal reserve and the occ in terms of block chain is you will not see it separated out. you see the examination authorities of both regulators, saying, we want to make sure this is ok. of how big does it get. a lot of people are saying, we want to build block chain. if you start building a ledger that is handling $5 billion in payments, that is when the federal reserve will step in. if it is a small ledger, they will be ok with it. once it gets larger that is when the examiners will take a look. asra: i want to turn briefly well to the treasury report, a separate issue. one thing that seems to have got wall street fluttering are the mo

for an example, the cftc, they allowedd that they have one group to be a derivative clearing organizationin. it took them two years to educate them. nejra: when it comes to block chain technology, what is the regulator he outlook? does block chain become a financial market utility? what does it mean for banks? >> the federal reserve and the occ which are the regulators in the united states will take a look at block chain and it will fall under their payment systems methodologies. again, they will use existing regulations. the thing with the federal reserve from the occ specifically when it comes to block chain, i don't think you will not see it separated out. you see the examination authorities of both regulators, saying, we want to make sure this is ok. it is a function of how big does it get. a lot of people are saying, we want to build block chain. if you start building a ledger that is handling $5 billion in payments, that is when the federal reserve and occ is going to step in. if it is a small ledger, they will be ok with it. once it gets larger that is when the examiners will take

for a brief example the cftc, , they announced that they have , earlier this year allowed one , grouperivative clearing organization for bitcoin. it took that organization two years to educate them. nejra: and, nathan, when it comes to block chain technology, what is the regulatory outlook? does block chain become a financial market utility? what does it mean for banks? nathan: the federal reserve and the occ, which are the provincial regular is in the allied states will look at block chain and it will fall under their payment systems methodologies. so again, they will use existing regulations. the thing with the federal reserve and the occ when it specifically comes to blocking, -- block chain is i don't think you will be separated out, i think you will see the examination authorities of both regulars -- regulators saying, we want to make sure this is ok. it is also a function of how big does it get? a lot of people out there saying they want to build lock chain, but if you start building a system or leisure for example that is handling $5 billion in payments, that is when the federa

the cftc published a primer on bitcoin and said the virtual tokens used in coin offerings initially can come under oversight from them. there have been comments like this from other regulatory agencies like the sec and the currency has rebounded. this may prove short-lived. someing a stock that has link to cryptocurrency, overstock.com which i did not realize, they have a block chain investment and talking about starting its own cryptocurrency exchange. we have seen it track cryptocurrencies recently with bitcoin in particular, it is trading down but a bump up it had along with bitcoin over the past month. mark: at -- shery: the prospect for tax reform is in the spotlight with the trumpet ministries and linking it success to that of the market. even steven mnuchin is now attributing the market rally to tax reform. no question the rally is into reasonably highest fixations about getting tax cuts and tax reform done to the extent we get the tax deal done, the stock market will go up higher but no question in my mind that, if we do not get it done, you will see a reversal of a significant

it shows the cftc net long positioning data for brent and wti.ular is at a record long position. what is going on here, are all these oil bulls because offside is indeed this turns out to be a short-term supply gap as ed morse put it? forcing more link in the market as people get in and vy for the higher scenario. we have also heard about the saudi minister speaking to hedge funds and talking about what their plans are. maybe they are buying into that story, that opec have been saying for four months now, they were seeing $60 oil by the end of the year. your close to that now, the do fear. as i said, some of the geopolitical things in this region are temporary. one would hope, in terms of stability of the region. it at the same time, we are also hearing about this length, about opec and the iea talking about better demand forecast the may have been talking about before. we are also seeing opec saying some of these stockpiles are coming down closer to five-year averages, which is what they were aiming at. that are are issues more to the fundamenta

for an example, the cftc, they announced that they allowed one group to be a derivative clearing organizationears to educate. nejra: when it comes to block chain technology, what is the regulatory outlook? does it become a financial market utility what does it mean , for banks? >> the federal reserve and the occ which are the regulators in , the united states will take a look at block chain and it will fall under their payment systems methodologies. they will use existing regulations. the thing with the federal reserve and the occ in terms of block chain is you will not see it separated out. you see the examination authorities of both regulators, saying, we want to make sure this is ok. it is a function of how big does it get. a lot of people are saying, we want to build block chain. if you start building a ledger that is handling $5 billion in payments, that is when the federal reserve will step in. if it is a small ledger, they will be ok with it. once it gets larger that is when the examiners will take a look. nejra: i want to turn briefly as well to the treasury report, a separate issue.

and the cftc and the state regulators issued an alert this week available on our website or the s.e.c.'s website, investor doufl a -- >> if you're an investor and have a complaint or concern about a broker dealer, how would you interact with finra, how would you seek to work with them to resolve the problem? >> there are a couple ways. you might -- we have a tips and complaints line. so you might call that up. and share your concerns and then we would follow up on that. >> we have a whistle blower line so if you see concerns about what's happening in the industry we have people who follow up on those kinds of tips. we have sometimes help desks and offer help lines for senior investors or people who care for senior investors that was started 2 1/2 years ago out of our boca raton office and has had tremendous success getting calls from every state in the country from people age 17 to 102 calling up with questions of all kinds of things and the goal of the help line is to provide support of the environment for people who have basic questions or concerns about their broker that they would

the cryptocurrency market has been careful to avoid sec regulation and they have mightoked that the cftc step in. this is a blow to the 10 year cryptocurrencies that are started and it does not directly impact bitcoin. it might hit it short-term sentiment wise. i give could be painful. that does not mean it would -- one he way higher in a month's time. it is a good blog today. go on follow it. we will talk about what is happening with the reentry story around mifid 2. and offering u.s. banks a key reprieve. we will get the wider impact on what this means. mark cudmore thinks the banks should be rallying around this. this is bloomberg. ♪ guy: 7:46 a.m. in london. two 40 6 p.m. in hong kong. here is juliette saly. arabia's oildi minister says they are ready to ipo.lete the they declined to answer questions and whether chinese investors are interesting and buying stakes in the state owned oil giant. bridgewater associates is adding to its short against the italian economy. the world's largest hedge fund disclosed a bit. more thanad wagered $1.1 billion against shares with six italian financ

as long as regulators and the cftc came out and said, listen, some of these things are commodity so this comes under our jurisdiction, that gives the market clarity, which would be a good thing that's why we reversed today, we're back up to 5500. for me, regulation equals clarity, is a good thing for bitcoin. >> isn't the argument, though, that you can't ban it. what are you going to start throwing computers out the window bottom line is there is no banning it i think it just forces a period where they need to clarify, which is what you're saying. there is no banning. >> and i would actually argue, with bitcoin regulation, you actually have a lot of regulatory arbitrage going on, if one nation state bans it, it pops up stronger in other nations, so you have a game of bitcoin whack ahole going on >> you might be thinking, who is this guy who is joining our conversation a partner at placeholder capital, he's come up with a way to actually value bitcoin. that's why he is here joining on this discussion. the trouble that a lot of people have, they see a 9% pullback in bitcoin. they're like,

they're looking at overlapping functions between the cftc, meaning the banks have to have octopus armsregulators. stuart: more deregulation for the push forward the trump agenda. >> trump is the the deregulator faster than ronald reagan. he unlocked 60% of the regulation put in place under obama administration. look in context how big it got under obama. stuart: well-said. it might have some effect on the market. we're only down 7 points now. we were down 40 earlier. news you might free up money from the banks. i think that is positive. liz: look at that turn. stuart: i want to move on to another theme on this program which is the amazon effect. look at this. both target and costco are launching delivery and pickup services. that is very interesting. they're trying to compete with amazon of course. joining us the man who understands business right from the get-go, star of tv's "bar rescue," author of the book, i can read that, don't bs yourself. i will read that on the air, john favor. welcome to the show -- jon taffer. all kind of industry everybody is going to deliver, deliver to you

one is that etf's in 2007 were about, what, half a trillion now it's $2.5 trillion >> the cftc and then what caused that. that's a little scary. all this time later we're still not sure >> i also think, though, that the actual macro conditions in 1987, there's a massive amount of stress in the markets ten-year yield went from 7% to 9% in no time. the market was already down more than 10% in two months before the crash. the week before was awful. in other words, it was a tremendous amount of stress placed on the market >> it didn't come out of nowhere is the point >> yeah. >> clearly you know the day of the crash that went from nine to seven >> right >> one day >> it was like watching -- >> one final point, i almost think 87 was this unfortunate mix of the high-tech portfolio insurance and the low tech remember the phone is not getting answered that didn't help anybody today -- >> joe >> i was going to do my imitation. i was a stockbroker at ef hutton right then, and i was under my desk we had an earthquake too that just happened out in los angeles, but then my phone was ringing. one in

the data tells you you have these wide ranges. if you look at cftca, it tells you longer sterling. there is a real divergence of views taking place, and it is understandable given what is coming up. we are going to push back the deadline. to push back the point where we do a deal. december, possibly later. we know we have a limited time for the brexit negotiations. of course people are going to be increasingly concerned. when sterling moves, it moves. we need to protect against what happens at the margins. should mark carney carry through with his proposition to raise rates in november? argument wenk the need to worry about inflation right now. the bank of england always said there would be a move up to 3%. why theynderstand suddenly feel to make a move on that. the only positive argument for making a move now is against the bank of england a little more ammunition maybe later in the cycle, other than that, i don't see why. use brexit as perhaps justification for stepping back yet again? simon derrick stays with me for the next hour. if you are trave

cftc, ftc,ave the now we can look at what is realistic in terms of rolling back relation to help capitalou think is going to get done? ken: some seeds still need to be filled, but you're right important positions are filled. i think regulators are going to look at the rules methodically. they will get treasury reports. alix: this is a guideline basis. ken: they will say where can we recalibrate on things like supplementary leverage ratio, liquidity ratio, not do away with them entirely, but is this an impediment to u.s. markets? ruy will look at our swaps les. are they creating fragmentation in the markets? with other line up jurisdictions? way impeding capital formation? we still want investor protection. are is a primary goal, but our rules structured in such way that we can bring small and medium sized companies to market? thoughts.oin ken: that is not something we have been interested. our investors are looking at block chain. alix: thank you for your time. appreciate it. ken bentsen, ceo of sifma. david: thank you. terrific interview. we will be talking soon with eli ricks, he -- li