CFTC Might Get More Power Than SEC Over Crypto With New Bill• March 29, 2022 6:05 pm • Comments
When it comes to the regulation of the crypto industry, many often debate what government committee should be responsible for that role.
A newly introduced bipartisan bill now reveals that there is a proposed regulatory change that would essentially allow the CFC to have more power to regulate the industry at the SEC’s expense.
The news has been reacted to positively by the crypto industry as the SEC’s recent regulatory actions has been accused of stifling innovation and progress in the industry.
The new bill will essentially break down how regulation will work as a whole where certain parts will fall into the CFTC’s domain while others will remain with the SEC.
Bipartisan Bill Would Give CFTC More Power Over Crypto at SEC’s Expense https://t.co/Hfyl04FGdf
— Nevo Financial (@nevofinancial) March 27, 2022
“The work we’re doing is going to be a very complex and intensive review of the different aspects of this industry,” Sen. Gillibrand announced at a Politico event in Washington, D.C., on March 24. “Some parts will be regulated by the CFTC, some parts will be regulated under the SEC.”
That will include clear criteria for classifying digital assets as securities or commodities, Gillibrand added, noting that the crypto market changes and innovates frequently.
It would also look at cybersecurity, bank regulation, consumer protection and stablecoins — the latter will be a big part of the bill, as there is growing concern that stablecoins could endanger the stability of the U.S. financial system.
There’s also a particularly deep political divide on the matter — and really all of crypto — with Democrats focused on protecting consumers and the economy, and Republicans on fostering innovation.
One of the biggest issues that have plagued the industry so far is the SEC’s classification that digital assets like crypto are considered securities and therefore fall under their domain of authority.
As a change to this, the idea proposed now is that there would be a special division under the CFTC that would work with the SEC to oversee regulation of crypto.
Investors expect the approval of this bill could drastically alter the SEC’s possible future actions and create a more favorable landscape within the United States.
With that being said, many expect that the SEC would not give up authority without any conflict and are awaiting a response to this bill.
Multiple US senators are working together on a broad-based regulatory framework for crypto explaining SEC and CFTC control. Meanwhile, the bank of England joins MIT in CBDC research efforts. Find out in the market report!https://t.co/mpqBd4FlST
— Secure Digital Markets (@SD_Markets) March 28, 2022
That Bill, Lumiso said Bloomberg, at the time, “will create a new organization under the joint jurisdiction of the Commodity Futures Trading Commission and the Securities and Exchange Commission to oversee the digital asset market.”
Which, given the sharp elbows of SEC Chairman Gary Gensler – who has called the cryptocurrency industry the “Wild West” of finance – and CFTC Chairman Rostin Behnam, could be a two-cats-in-a-bag situation.
Gensler, who taught crypto and blockchain Massachusetts Institute of Technology (MIT) would not give up a right it seized — but didn’t confirm in court — without a fight, before the SEC took over.
While Gillibrand revealed that she attended the said Politico event in Loomis, the news outlet said He predicted that a bill would be ready in the next few weeks.
Investors are now investigating the likelihood of this new bill getting passed and what the potential effects could be.
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