The Commodity and Futures Trading Commission (CFTC) has already started preparing to become the crypto industry’s watchdog, says Chair Rostin Behnam.
He told the Senate Agriculture Committee on Thursday that the volatility in the market and its impact on retail customers emphasize the immediate need for regulatory clarity and market protections.
On the other hand, Securities and Exchange Commission chairman Gary Gensler, who appeared before the Banking Committee, doubled down on his view that most crypto tokens and companies will have to work with his agency in some capacity. He believes that of the nearly 10,000 tokens in the crypto market, the vast majority are securities. Gensler said offers and sales of these thousands of crypto security tokens are covered by the securities laws which require that these transactions be registered or made pursuant to an available exemption. As such, he asked the SEC staff to work directly with entrepreneurs to get their tokens registered and regulated, where appropriate as securities.
Christine Parker, the vice president and deputy general counsel for Coinbase, said they are at crossroads when it comes to crypto. He called for the need for clearer definitions and classifications. Parker said digital asset commodities should be regulated by the CFTC and not through enforcement actions by the SEC. Valerie Szczepanik, director of the Strategic Hub for Innovation and Financial Technology (FinHub) office at the SEC, said the two agencies (CFTC and SEC) work very collaboratively. He explained they really want to get it right as it’s all about investor protection and market integrity. The two agencies want to cover the landscape so that the goals are achieved.