CFTC Chair of Prior Year Summons Congress to Move In On Cryptocurrency Regulation Guidelines
Many cryptocurrency firms are unclear about regulations, which makes it extremely difficult for them to ensure that they are abiding by the law. Timothy Massad, the former chairman of the U.S. Commodity Futures Trading Commission (“CFTC”), recently commented on the issue and discussed that Congress needs to fix the issue in the interest of market operations.
As he stated
“Congress needs to fix this by creating regulatory oversight of the cash market for crypto-assets, and the trading platforms and other intermediaries that operate in that market,”
“Either the SEC or the CFTC is competent to regulate this area if given the power; it would be inefficient to create a new agency. I recommend making the SEC the lead agency.”
Massad is not the only person who believes that there needs to be more clarity concerning regulations. Many others, including Hehmeyer Trading + Investments, stated that the CFTC is “best suited” to regulate the cryptocurrency industry. Another example is think tank Coin Center, which seemingly agrees with Massad that there needs to be an adoption of regulations in the industry. As Coin Center stated
“We would potentially support the creation of a new, unified federal regulator for trusted parties in the cryptocurrency ecosystem (exchanges, custodians, etc.) but it must come alongside full federal preemption of existing, vague, and innovation-chilling state money transmission licensing laws as they are applied to cryptocurrency activities.”
When it comes to regulations though, there are outstanding issues as to which cryptocurrency assets should be considered securities and which should be considered commodities. There are those who believe that the distinction is necessary, while those who oppose believing that it could lead to a reduction in the global growth of assets. Moreover, due to the variance around the country on regulatory requirements already in place, it becomes difficult to create a uniform system.
As Massad discussed,
“When regulatory requirements vary by state, it is expensive to build compliance systems, and difficult to create national, let alone international, markets. Our securities markets would not have become the envy of the world if we had relied solely on state blue sky laws and never adopted the Securities Act and Securities Exchange Act.”
Another outstanding issue is whether Congress will take into consideration Massad’s suggestions. At this point, it isn’t clear.