The SEC and the CFTC are negotiating a memorandum of cooperation on cryptocurrency regulation

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler revealed in an exclusive interview with the Financial Times on the 24th that he is discussing a formal agreement with his counterparts at the U.S. Commodity Futures Trading Commission (CFTC) to secure cryptocurrencies Transactions have adequate safeguards and transparency.

1

The SEC and CFTC have always paid attention to different levels of the financial market, and there is little cooperation. The SEC mainly regulates securities, and the CFTC mainly regulates derivatives, but cryptocurrencies may straddle these two markets. As a result, Gensler, who served as CFTC chairman from 2009 to 2013, revealed that he was seeking a “Memorandum of Understanding (MoU)” with the CFTC.

The SEC has jurisdiction over platforms where cryptocurrencies that are considered securities are listed. If a cryptocurrency representing a commodity is listed on an SEC-regulated platform, the SEC, the securities regulator, will notify the CFTC of this information, Gensler said.

Regarding the agreement under discussion, Gensler pointed out: I am talking about a specification manual for exchanges to protect all transactions, no matter what kind of trading pair, whether it is a security token-security Token Trading, Security Token-Commodity Token Trading, Commodity Token-Commodity Token Trading. To protect investors from fraud, front-running, manipulation, and improve order book transparency.

Gensler has been calling for more regulation of cryptocurrencies and has urged discussions on whether trading platforms should be registered with the SEC. He believes that earning market integrity by creating exchange playbooks will really help the public, and if the cryptocurrency industry is to make any progress, this move will build some better trust in the market.

CFTC seeks to expand jurisdiction

At the same time, however, U.S. Senators Kirsten Gillibrand and Cynthia Lummis introduced a bipartisan bill in early June that includes a cryptocurrency regulatory framework that seeks to expand the CFTC’s jurisdiction on the assumption that most digital assets are similar Commodities, not securities. 

Rostin Behnam, who took over as CFTC chairman in January, previously told the Financial Times that there could be hundreds, if not thousands of cryptocurrencies, including bitcoin and ethereum, that would qualify as commodities, arguing that regulating the spot cryptocurrency market is a natural option for the agency, noting that there is always a natural relationship between derivatives and the spot market.

Benin and Gensler declined to comment on whether the CFTC’s expanded jurisdiction over cryptocurrencies would cause friction or confusion with the SEC. However, Benin pointed out that passing legislation would clarify which tokens constitute commodities and which ones Much progress has been made on the very delicate and difficult issue of tokens constituting securities.

Gensler did not comment on the bill, which seeks to expand the CFTC’s jurisdiction, although he warned after the bill was introduced that the move would likely affect the regulation of the broader capital markets, not to undermine the $100 trillion capital market. Existing protection mechanisms, pointing out that over the past 90 years, this regulatory regime has been very beneficial to investors and economic growth.

With the improvement of market supervision, the digital currency industry will also usher in new developments. Investors who are interested in this can also consider entering this market by investing in asic mining machines. At present, the price of asic mining machines is at a historically low level, which is an ideal time to enter the market.


Post time: Aug-29-2022