Topic: SEC Vs. CFTC fight over crypto market regulation, What are your thoughts? (Read 302 times)

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the whole funny part is
the CFTC has had its fingers on ethereum during its PoW days but now its PoS suddenly CFTC doesnt care much and passed it onto SEC .. yet CFTC wants bitcoin now.
even though bitcoin is not as much of a commodity as ethereum.
the reasons is that under CFTC ethereum is no longer a environmental concern so any possible 'enforcements' the CFTC forwards to FATF would just from now on be market related, which the SEC can handle

Was going to respond to say something in this line of thought but you were quicker. This is what I'd thought elsewhere before too -- SEC with limited powers, although I do believe you miss out something really important, that they also have powers of enforcement, which means they can and do go after what they deem as crime (I wonder if it's even more rabid/frequent than CFTC, as media suggests).

This crypto fight is a turf war that's been brewing since early year too so it might drag on a bit before resolution.

Whether it's the SEC or the CFTC, it doesn't matter who makes the regulation, because regulation is inevitable, I just hope the regulation is not too strict for investors.

What are my thoughts on the matter? My thought is that Bitcoin cannot be regulated and therefore its a meaningless fight over who will attempt and fail to regulate cryptocurrencies next.

As long as we are free to hand each other money anonymously, without the government keeping a digital eye on each transaction, there will be no real way to regulate the crypto market. Especially not Bitcoin. So their only choice is to attack the centralized end points like service providers. And there still exist service providers who wish to do their business anonymously. We can see drug dark markets using I2P or TOR as a slightly distasteful example of this. But the proof of concept is there.

So who cares what the regulators think? Bitcoin is unkillable and uncontrollable.

here is the thing though. the SEC has limited power and jurisdiction. they can only audit, policy create and monitor businesses involved in the exchange/swap markets of the asset

however CFTC can get more involved. much like they allow the EPA to get involved in the quota and inspections of farms/refineries/mining.
yep when governments start to put regulations of farmers about how much cattle/yield they can grow. what feed/fertiliser/how much land a farmer can have. etc.. you then start to see how the CFTC can start controlling the mining reward amounts, transactions counts, and even the mining method

I think it is very possible, they do not have to make it messy about who has control, they can both work together without hassles.

The SEC has been functioning mainly to protect Investors from pump and dump schemes and maintain a safe market for investors. As crypto develops further we might see extended functions that they may need to perform for regulatory purposes under the government, and to think of that as possible makes it a bit scary.

Ideally none should regulate the crypto market in US. If it has to be regulated, a new governing body needs to be form where they can have representatives from both SEC and CFTC. Cryptocurrency doesn't fall under the purview of SEC or CFTC. Also with their own set of old regulations, they will do more harm rather good in crypto market.

It must be a new body or no one else! Crypto is neither a security nor a commodity.

The SEC is a criminal organization that is violating their own set of laws to get as much power out of their agency as possible.

The absolute best thing you can say about them, which is next to nothing, is that they have gone after $LBC and $XRP in major lawsuits the past few years while... I don't know, missing ones like Bitconnect, Terra/Luna or the plethora of actual 100% scams out there.

Does this gives you feeling that Bitcoin / Crypto market is being dragged into the complicated control by Governments?

However they think, SEC and CFTC "could" work together by finding out some legislation in the middle.

Does this gives you feeling that Bitcoin / Crypto market is being dragged into the complicated control by Governments?

The chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has reiterated that most crypto tokens are securities, emphasizing that “the law is clear on this.” However, the Commodity Futures Trading Commission (CFTC) has asked Congress for authority over crypto spot markets and several bills have been introduced in Congress this year to provide the CFTC with the necessary authority.

SEC Chairman Gary Gensler on Crypto Regulation
The issue of which federal agency should regulate the crypto market has gained much attention recently. While the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, has said that the majority of crypto tokens are securities and should fall under the purview of his agency, many people and lawmakers believe that it should be the Commodity Futures Trading Commission (CFTC) that regulates the crypto sector. Moreover, three bills have been introduced in Congress this year to make the CFTC the regulator of the crypto markets.

In an interview with CNBC Monday, Gensler responded to a question about who should regulate the crypto sector. The SEC chief explained:

Our agency is an agency that oversees this basic bargain. When a group of entrepreneurs is raising money from the public and the public is anticipating a profit, they need disclosure — full, fair, and truthful disclosure, and that’s the core bargain in our capital markets.

The SEC chairman continued: “You get to take the risk but the person raising money or the persons raising money has to disclose various information to you. That’s how our capital markets work best, and the SEC is very good at this and that’s what we do.” He emphasized:

The law is clear on this. I believe based on the facts and circumstances, most of these tokens are securities.

On Monday, at the Financial Stability Oversight Council (FSOC) meeting, presided by Treasury Secretary Janet Yellen, Gensler reiterated: “Of the nearly 10,000 tokens in the crypto market, I believe the vast majority are securities. Offers and sales of these crypto security tokens are covered by the securities laws. Given that most crypto tokens are securities, it follows that many crypto intermediaries are transacting in securities and have to register with the Securities and Exchange Commission in some capacity.”

Regarding the SEC collaborating with the CFTC, Gensler stressed:

To the extent that crypto intermediaries may need to one day register with both the SEC and the Commodity Futures Trading Commission (CFTC), I would note we currently have dual registrants in the broker-dealer space and in the fund advisory space.

Meanwhile, the CFTC has asked Congress for authority over the crypto cash market. CFTC Chairman Rostin Behnam explained last week that since the CFTC is a derivatives regulator, it does not currently oversee cash markets. Therefore, he has asked Congress for “cash authorities, so that we can go in the bitcoin cash market, the ether cash market, and the other digital commodity token [markets],” the CFTC chief explained last week.

He also said that the SEC and CFTC will have to “figure that out legislatively” because crypto is a new asset class. “There are different components and characteristics of this asset class as opposed to traditional asset classes,” Behnam said, adding: “We have to rely on 70-year-old case law to determine what’s a security, what’s a commodity.”