After the proposition of the Lummis/Gillibrand new crypto bill seeking to transfer much of crypto regulation to the CFTC, the chairman of CFTC, Ross Benham, has said that his agency is set to move further into the cryptocurrency regulatory space. Ross said one of the goals of CFTC would be to define which cryptos would come under its jurisdiction. The new crypto bill, which is still very much a proposal, may be broken down into pieces, adjusted, and may take a couple of years before it is passed.
The new bill voices most of the concerns the ordinary crypto investors felt, one of which is the perceived rigidity of the SEC to innovations in crypto and a lack of clarification as to where crypto stands from a regulatory perspective going forward. This is evident by the actions of SEC chairman Gary Gensler, who is largely unpopular given that all his moves have tended towards enforcement rather than any helpful discussion. It is evident that there are scams in the crypto sector and that they need to be rooted out as quickly as possible. Nonetheless, there are also legitimate projects that just need guidance on how to operate in a compliant way.
With the SEC not giving confidence to crypto companies, it might be difficult for them to come out to discuss ground-breaking technologies. Rostin Benham, the Chairman of CFTC, said in a panel discussion yesterday,
“As we see these coins develop and change, I think it’s important…to start to draw lines around which coins are commodities and which coins are securities. We are a derivatives regulator. We don’t regulate cash transactions in agricultural, energy, or metal products. But this [crypto] market that we’re seeing emerge is retail-oriented and highly speculative.”
Even though CFTC gets to control the crypto market regulations, it may not have a smooth ride as it also has its detractors. An example is the alleged manipulations in the precious metal market, especially silver. However, whichever way things go, crypto will still be regulated by people with the traditional financial market knowledge and with less understanding of digital currencies. This means that things might not change much in the crypto space.
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