The Importance of Legislating Through Courts in Crypto Governance
Kristin Johnson, a commissioner of the United States Commodity Futures Trading Commission (CFTC), believes that legislating through courts could be a solid path for handling cryptocurrencies in the country. Speaking at the Blockchain Association’s Policy Summit, Johnson emphasized that companies implementing their own plans would be the best outcome for corporate governance of crypto firms. She referenced the introduction of reporting requirements for Binance as part of a $4.3 billion settlement with the exchange, highlighting the role of policymakers.
Clarification from Congress and Trust in the Legal System
In addition to legislating through courts, Johnson suggested that Congress could provide clarification on the definition of a security, addressing one of the main concerns behind enforcement actions taken by the U.S. Securities and Exchange Commission (SEC) against crypto firms. She acknowledged that relying on courts for guidance might take time but expressed trust in the legal system’s ability to handle new financial technologies.
Settlements, Lawsuits, and Regulatory Controls
While both the CFTC and SEC have settled lawsuits with crypto firms in some cases, many companies have sought their day in court. The SEC has ongoing lawsuits against Binance and Coinbase filed in June, while the CFTC took legal action against Voyager Digital in October. Johnson has been vocal about advocating for stronger regulatory controls in the crypto space and has called on Congress to expand the CFTC’s authority over digital assets.
Hot Take: Balancing Regulatory Measures and Legal Processes
The debate surrounding crypto governance continues to highlight the importance of finding a balance between regulatory measures and legal processes. Kristin Johnson’s perspective on legislating through courts provides an alternative approach to handling cryptocurrencies, offering potential guidance but acknowledging potential delays. With ongoing lawsuits and enforcement actions, the role of Congress in providing clarification and expanding regulatory authority remains crucial for the future of the crypto industry.
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