Commodity Futures Trading Commission (CFTC) Commissioner Summer Mersinger says that Congress must order the Securities and Exchange Commission (SEC) to cooperate with the CFTC when drafting crypto legislation.
Speaking at the DC Blockchain Summit, Mersinger said that the agencies were unlikely to agree on legislation unless Congress mandated cooperation.
CFTC Commissioner Asks Congress to Unite Crypto Regulators
“Do I think that’s going to happen on its own? No,” she asked. “I think we would need probably some sort of legislative mandate to force us to sit down,” she speculated.
Fellow Commissioner Kristin Johnson joined Mersinger at the Forward Thinking: Policies Shaping The Digital Asset Markets, Act I fireside chat.
When questioned on how crypto intermediaries are defined according to the CFTC, Johnson said she supported new cybersecurity rules and requirements for customer funds to be kept separate.
Mersinger’s statements come during intense regulatory scrutiny on the industry following several high-profile crypto failures. The failures, including the collapse of Bahamian exchange FTX and, most recently, the depegging of a major U.S. stablecoin, has put the skids on attempts to regulate the industry. House Financial Services Committee Chair Maxine Waters recently committed to advancing U.S. stablecoin legislation. This renewed urgency came after USDC depegged following the collapse of Silicon Valley Bank.
Cooperation Could Lead to Better Definitions
Commissioner Mersinger’s calls for cooperative lawmaking come when the U.S. crypto regulatory landscape is arguably at its worst. Greater cooperation could bring more clarity to crypto bills awaiting passage in Congress.
The Digital Commodity Exchange Act of 2022 and the Digital Consumer Commodities Protection Act of 2022 emphasize the CFTC’s role in digital asset spot markets.
The Digital Commodity Exchange Act of 2022 says that the SEC has jurisdiction over digital assets representing an ownership stake. Assets that do not “convey rights and obligations typically associated with a security” should be considered a commodity. This definition would bring them under the CFTC’s authority. The SEC could clarify the term “ownership stake” and, in doing so, bring a greater definition to the CFTC’s authority.
The Lummis-Gillibrand Responsible Financial Innovation Act asks digital asset exchanges to register with the CFTC. It places assets that provide owners with a financial interest in a business entity under the SEC’s jurisdiction. Absent from this bill is what constitutes a security or a commodity, which the SEC could help clarify.
The SEC has issued enforcement against crypto projects for offering unregistered securities without additional guidelines on how projects can comply with securities laws. SEC Commissioner Hester Peirce said in a recent Bankless podcast that the SEC should be regulating capital raises.
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