The Commodity Futures Trading Commission (CFTC) is pushing to become the primary regulator for the cryptocurrency industry, according to Commissioner Summer Mersinger, who spoke recently at the Reuters Commodity Trading USA conference in Houston.
Mersinger is one of five commissioners on the independent board that has launched a review of its potential role on cryptocurrencies. He believes that the CTFC “may have some expanded role” in areas such as spot-market crypto trading, although the agency has historically not regulated the spot market.
“You see the industry becoming the primary regulator of the CFTC,” she said. “We are still a strong regulator but our registrants have a lot of flexibility. They are very interested in that approach in a top-down way some other financial regulators do.”
Under Gary Gensler’s reign, the SEC has claimed that many cryptocurrencies are considered “securities” that fall under its control. However, several players in the industry have expressed a preference to be regulated by the CFTC.
Cynthia Loomis’s Bill
On Tuesday, Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gilligrab (D-NY) introduced a bill, the Responsible Financial Innovation Act, that aims to create a “complete regulatory framework for digital assets” in hopes of balancing current market needs . For guardrails and consumer protection while promoting financial innovation.
Under the bill, a cryptocurrency would be classified as a “commodity” or “security”, depending on the “purpose of the asset and the rights or powers conveyed to the consumer”. However, bitcoin and ethereum, which hold significant shares of the global crypto market cap, will be treated as “commodities”, achieving “subsidiary assets” status.
“As this industry continues to grow, it is important that Congress carefully draft legislation that promotes innovation while protecting consumers against bad actors,” said Ms. Lumis.
Sen. Lumis has been the Senate’s most vocal advocate for cryptocurrency since taking office last year. According to his 2022 financial disclosures, he reportedly holds between $100,000 and $250,000 in bitcoin.
Earlier this month, the CFTC filed charges against Gemini, alleging that the exchange filed false or misleading statements related to its bitcoin futures product. The regulatory authority said the New York-based exchange made “material false or misleading statements and omissions of the Commission”.
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