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CFTC Edges Closer to Becoming Primary Overseer for Crypto

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According to CFTC Commissioner Summer Mersinger, US policymakers are getting closer to putting the agency in charge of cryptocurrency regulation.

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The appointment will expand the mandate of the CFTC and pave the way for it to regulate digital assets such as cryptocurrencies and non-fungible tokens (NFTs). mersinger made Comments this week at the Reuters Commodities Trading USA conference in Texas.

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From an industry perspective, a CFTC that regulates cryptocurrencies would be a much better choice than the Securities and Exchange Commission (SEC), whose chairman Gary Gensler believes that cryptocurrencies are securities and should be regulated in the same way as stocks. He previously referred to stablecoins as casino poker chips, highlighting the industry’s implicit disapproval.

Senator support

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Many industry leaders supported a bill introduced June 7 by US Senators Cynthia Lummis and Kirsten Gillibrand that would make the CFTC the industry’s primary regulator. Mercinger commented:

“You see the industry coming together around the CFTC becoming the main regulator.”

However, the bill has yet to be passed, but a discussion has begun in Congress about which agency should regulate the crypto industry. In April, it was reported that the two agencies would join forces to regulate the cryptocurrency, but that seems to have faded into the background.


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Mersinger noted that the CFTC has begun reviewing its potential role in relation to cryptocurrencies. The staff is looking into the regulation of spot cryptocurrency trading markets as a starting point. “We are still a strong regulator, but our registrants have a lot of flexibility,” she added.

Such flexibility would not exist if the SEC became the industry regulator, as crypto companies would have to jump through the same hoops as banks and stockbrokers to get registered and approved.

If the CFTC does become the industry’s oversight body, most digital assets will be treated as commodities rather than securities. Agency head Rostyn Behnam also endorses the Lummis-Gillibrand bill, commenting on June 8 as follows:

“One of the most difficult things that we have to do – and I think they do a very good job of it – is deciphering between a commodity and a security.”

Lummis met with Gary Gensler this week to get feedback on the bill, but he hasn’t commented yet. According to Crypto Potatoboth agencies treat Bitcoin and Ethereum as commodities, but a gray area remains for the other 13,300 or so tokens listed on platforms like CoinGecko.

A win for the crypto industry

Messari founder Ryan Selkis commented that the bill could also speed up U.S. spot exchange-traded crypto fund (ETF) approval and remove Gensler as the current barrier.

Galaxy Digital CEO Michael Novogratz exclaimed that the bill was “extremely positive,” giving Senators “three salutes.” “It’s shocking how many Democratic politicians I have in my office right now trying to get the right stance on the crypto industry,” he said at a June 8 conference.

Featured image courtesy of TimesofIsrael

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Credit : cryptopotato.com

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