Regulatory Chaos in the US
Delivering clear regulatory guidance for digital assets in the United States has been a persistent struggle. The SEC oversees securities, while the CFTC regulates derivatives on commodities, leaving a gap for digital assets that don’t fit either category. Amid the chaos, specialists urge stakeholders to resist a bearish narrative.
Nonetheless, former SEC General Counsel and Commissioner at CFTC, Dan M. Berkovitz, believes that legislative amendments are necessary to regulate market regulation with respect to digital assets. He maintains that existing laws can accommodate new technologies, such as digital currencies and blockchain-traded assets.
No Rift Between CFTC and SEC on Digital Assets?
Between 2019 and 2023, the United States industry of digital currency invested $56.44 Million in lobbying. With $20.2 Million spent this year alone, showing a paradox between industry influence and regulatory scrutiny. CFTC’s Chairman Rostin Behnam was known on Congress for a more central role in establishing a regulatory framework for digital currencies, emphasizing the need for collaboration.
Regardless of the observed divergence between the agencies regarding the appropriate jurisdiction of digital currencies, Berkovitz insists there is no “rift” between the CFTC and the SEC in regulating digital assets. He maintains that while the agencies coordinate on digital currency issues in the same way they do on others, differences do not rise to the level of a “rift.”
Furthermore, Merkle Science CEO Mriganka Pattnaik stressed that the legislation should clearly define the roles of the CFTC and the SEC in any regulatory framework, simplifying the review process. Any proposition categorized as a security by the SEC should be excluded from eligibility for a CFTC-licensed facility, and the CFTC would assess whether the asset aligns with its criteria for listing and disclosure.
Congress Plays a Crucial Role
Recent events, including FTX founder Sam Bankman-Fried’s conviction, have contributed to the bipartisan support for recent legislation. The industry welcomes the Lummis-Gillibrand bill, which has gained momentum. Patnaik argues for bipartisan support, emphasizing the need for regulatory clarity to protect consumers from scams and abuses.
Hot Take: Urgent Congressional Action Needed
The United States needs to provide regulatory clarity to regulate innovation, protect citizens, and respond to new threats, as it has historically done. A bipartisan approach is important to prevent further harm to consumers. Rushing a half-baked policy could do more harm than good.
Owen Patter is a distinguished crypto analyst, accomplished researcher, and skilled editor, leaving a notable imprint on the cryptocurrency landscape. As a proficient crypto analyst and researcher, Owen delves into the intricate realms of digital assets, offering insights that resonate with a diverse audience. His analytical acuity is harmoniously paired with adept editorial skills, allowing him to transform complex crypto information into easily comprehensible content.