In an interview with CNBC, CFTC Chairman Rostin Behnam discussed his agency’s relationship with the SEC. He argues that the two entities work together in order to regulate the crypto market. Other points raised: the real character of a cryptocurrency as well as the lack of regulation in the American cryptographic market. With that in mind, Behnam pointed out that the CFTC and SEC still rely on 70-year-old case law to determine what a security and/or commodity is.
CFTC and SEC rely on 70-year-old case law to determine a crypto security or commodity
CFTC and SEC collaborate to regulate the crypto market
The responsibilities of the CFTC in regulating the use of crypto and crypto-related activities are quite unclear. The same is true for the SEC. According to an article published on the website K&L Gates, the SEC has the power to regularize “securities”. For its part, the CFTC enjoys full regulatory authority over derivatives transactions.
Through their respective presidents, the two entities claim that their collaboration is going well. Reflecting on their relationship during the CNBC interview, the CFTC chairman said, “We get on great. We can share, we have shared and we will share”.
Cryptocurrency: title or commodity? An eternal problem that stands between the two agencies!
At this time, the CFTC is unable to monitor spot markets. Which is really a problem. The president of this entity claimed to have asked Congress for the authority to control the spot market for Bitcoin, Ethereum and other digital commodity token markets.
A statement to which the chairman of the SEC responded by arguing that the majority of crypto tokens are securities. However, he admits that Bitcoin is a commodity. The chairman of the CFTC reiterates, however, that there is no turf war between the two regulatory entities.
By mutual agreement, the two structures will henceforth refer to the law to determine what a title or a commodity is. More explicitly, they will have to rely on 70-year-old case law. The thing is, cryptocurrencies are a new asset class.
The CFTC and the SEC are two independent agencies that each play a specific role in regulating the crypto market. Unfortunately, their liability is limited by whether crypto tokens are considered securities or commodities. Both entities are hoping for new laws to help them determine what a title or commodity is. To be continued…
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