The power struggle between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) is slowing the crypto industry’s progress, says FTX chief Sam Bankman-Fried.
The two regulators have been vying for control over the digital asset industry. Bankman-Fried highlighted that the CFTC and SEC could agree on who is responsible for licensing cryptocurrency exchanges as significant progress could be made. He believes it could solve about 60% of the problem.
Established in 1974, the CFTC looks after commodity futures and derivatives trading and regards digital currencies as commodities. However, the SEC doesn’t regard Bitcoin and Ether as securities. But this hasn’t stopped the regulator from going after other tokens and initial coin offerings (ICO). The SEC sees these as a capital-raising tool and an unregistered security offering.
Ron Hammond, the director of government affairs for the Blockchain Association, pointed out that this is more than an agency-level issue. He said congressional committees are jostling to see where their jurisdictions lie. Moreover, individual lawmakers are taking stronger stances around crypto-related issues. Hammond described the tussle between CFTC and SEC as “like a power grab”.
But Bankman-Fried is confident about some type of guidance coming in the near future. He said the crypto industry is not actually in a place with more federal oversight than it was a year ago. The industry is currently in a place where there are concrete proposals that could be enacted very soon. Other industry members feel that crypto regulation is in limbo around the world.
Nick Du Cros, the head of compliance and regulatory affairs at CoinShares, says they are waiting to see where things will go for a lot of countries. He highlighted that countries are coming together through mechanisms like G7 and G20. They have a roadmap and international standards. Cros also believes there is domestic political pressure and this triggers differences between different countries.