The Commodity Futures Trading Commission (CFTC) is pushing to become the primary regulator for the crypto industry, according to Commissioner Summer Mersinger who recently spoke at the Reuters Commodities Trading USA conference in Houston.
Mersinger is one of five commissioners on the independent board that has initiated a review of its potential role over cryptocurrencies. She believes the CTFC “could have some expanded role making” in areas such as spot-market crypto trading, despite the agency historically not regulating spot markets.
“You’re seeing the industry coalesce around the CFTC becoming the primary regulator,” she added. “We’re still a strong regulator but our registrants have a lot of flexibility. They have been very interested in that approach versus the top-down way of some other financial regulators.”
The SEC under Gary Gensler’s reign has claimed that many cryptocurrencies are considered to be “securities” falling under its control. However, many players in the industry have expressed the preference of being regulated by the CFTC.
Cynthia Lummis’ bill
On Tuesday, Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gilligrabd (D-NY) introduced a bill, Responsible Financial Innovation Act, which aims to create a “complete regulatory framework for digital assets” hoping to balance the market’s current need for guardrails and consumer protection, while promoting financial innovation.
Under the bill, a cryptocurrency would be classified as a “commodity” or “security” depending on “the purpose of the asset and the rights or powers it conveys to the consumer.” Bitcoin and Ethereum, however, which hold significant shares of the global crypto market cap would be treated as “commodities,” garnering the status of “ancillary assets.”
“As this industry continues to grow, it is critical that Congress carefully crafts legislation that promotes innovation while protecting the consumer against bad actors,” Ms. Lummis said.
Sen. Lummis has been the Senate’s most outspoken advocate for cryptocurrency since she took office last year. She reportedly owns between $100,000 and $250,000 of bitcoin, according to her 2022 financial disclosures.
Earlier this month, the CFTC filed charges against Gemini, alleging that the exchange filed false or misleading statements relating to its bitcoin futures product. The regulatory authority said that the New York-based exchange made “material false or misleading statements and omissions to the commission.”
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