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CFTC may become main regulator for crypto industry

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The Commodity Futures Trading Commission (CFTC) is receiving support to become the main regulator of the crypto industry among crypto industry stakeholders and US lawmakers, said Commissioner Summer Mersinger during the Reuters Commodities Trading USA conference in Houston.

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The CFTC Commissioner continued that the commission is also re-evaluating its potential role in the crypto industry, especially in areas such as trading crypto on the spot market. However, the reviews are still at a preliminary stage.

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According to him,

We are still a strong regulator, but our registrants have a lot of flexibility. They were very interested in this approach compared to the top-down approach of some other financial regulators.

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Several crypto exchanges have disclosed they prefer the CFTC to be the main regulator of the crypto space. FTX CEO and Founder Sam Bankman-Fried is lobbying the US Congress to give the CFTC a bigger role in industry oversight.

Meanwhile, a recently proposed bipartisan bill by Senators Kirsten Gillibrand and Cynthia Lummis wants to treat cryptocurrencies as commodities that should be turned over to the CFTC.

Who should regulate the crypto industry? SEC or CFTC?

With a recently proposed bill bringing the CFTC to the forefront of cryptocurrency regulation, industry experts are divided on who should regulate the industry, with some in favor of the Securities and Exchange Commission (SEC) and others pushing for the CFTC.

It is widely believed that the SEC has the most potential to oversee the crypto space because it has been at the forefront of its regulation.

According to Lark Davis, if the CFTC becomes the official regulator of the crypto industry, it will be “good and important” as “the SEC has hurt the crypto industry in the US.”

Katherine Kirkpatrick, general counsel at Maple Finance, says the CFTC’s taking over regulation of the industry is both good and bad.

This is bad, she says, because the CFTC is underfunded and under-resourced, so she wonders how the commission will stay amid the rapid development of crypto and DeFi.

On the other hand, Mark Hayes, senior policy analyst at Americans for Financial Reform, He speaks The SEC should be responsible for industry oversight because

Most cryptocurrency activity walks, talks, and acts like a security.

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