Crypto: What about the relationship between the CFTC and the SEC?

Crypto: What about the relationship between the CFTC and the SEC?

In an interview with CNBC, CFTC Chairman Rostin Behnam discussed his agency’s relationship with the SEC. He claims that the two organizations are working together to regulate the crypto market. Other issues raised: the true nature of cryptocurrency, as well as the lack of regulation in the US crypto market. With that in mind, Behnam pointed out that the CFTC and SEC still rely on 70 years of case law to define what constitutes a security and/or commodity.

The CFTC and SEC rely on 70 years of case law to define a security or commodity

CFTC and SEC cooperate to regulate the crypto market

The CFTC’s responsibilities in regulating the use of crypto and crypto-related activities are quite unclear. The same goes for the SEC. According to an article posted on the K & L Gates website, the SEC has the power to regulate “securities.” For its part, the CFTC enjoys full regulatory authority over derivatives transactions.

Through their respective presidents, the two organizations say their cooperation is going well. Providing an update on their relationship during the CNBC interview, the CFTC chairman noted, “We get along well. We can share, we have shared and we will share“.

Cryptocurrency: Property or Commodity? An eternal problem that stands between the two agencies!

The CFTC is currently unable to monitor the spot markets. Which is really a problem. The president of this entity claims to have asked Congress for authority to control the spot market for Bitcoin, that of Ethereum, as well as other markets for digital goods.

A statement to which the SEC chairman responded by arguing that the majority of crypto tokens are securities. However, he acknowledges that Bitcoin is a commodity. However, the CFTC chairman reiterates that there is no war between the two regulators.

By mutual agreement, the two entities will henceforth refer to the law to determine what constitutes property or goods. More categorically, they will have to rely on 70 years of judicial practice. The thing is, cryptocurrencies are a new asset class.

The CFTC and the SEC are two independent agencies that each play a specific role in regulating the crypto market. Unfortunately, their liability is limited by whether crypto tokens are considered securities or commodities. The two districts hope the new laws will help them address that issue. To be continued…

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Avatar by Ariela RASOANJANAHARY
Ariela RASOANJANHARI

My name is Ariela and I am 31 years old. I have been working in the field of web writing for 7 years now. I only discovered trading and cryptocurrency a few years ago. But it’s a universe I’m very interested in. And the topics covered in the platform allow me to learn more. A singer in my spare time, I also cultivate a great passion for music and reading (and animals!

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