Commodity Futures Trading Commission (CFTC) Commissioner Summer Mersinger says Congress should order the Securities and Exchange Commission (SEC) to cooperate with the CFTC when drafting crypto legislation.
Speaking at the DC Blockchain Summit, Mersinger said the agencies were unlikely to agree on legislation until Congress mandated the cooperation.
CFTC Commissioner Asks Congress to Unite Crypto Regulators
“Do I think it’s going to happen by itself? No,” she asked. “I think we’ll probably need some kind of legislative mandate to force us to sit down,” she speculated.
Fellow Commissioner Kristin Johnson joins Mersinger for 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 supports the new cybersecurity rules and requirements to keep client funds separate.
Mersinger’s statements come amid intense regulatory scrutiny on the industry following several high-profile crypto failures. Failures, including the collapse of Bahamian exchange FTX and, more recently, the collapse of a major US stablecoin, have dogged efforts to regulate the industry. Maxine Waters, chair of the House Financial Services Committee, recently committed to advancing US stablecoin legislation. This renewed urge came after USDC was depegged following the collapse of Silicon Valley Bank.
Collaboration can lead to better definitions
Commissioner Mersinger’s call for cooperative legislation comes as the US 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 role of the CFTC in the digital asset spot market.
The Digital Commodity Exchange Act of 2022 states that the SEC has jurisdiction over digital assets representing an ownership stake. Property that “does not convey the rights and obligations ordinarily attached to the security” should be considered a commodity. This definition would bring them under the authority of the CFTC. The SEC may clarify the term “ownership stake” and, in doing so, may bring a larger definition within the CFTC’s authority.
The Lummis-Gillibrand Responsible Financial Innovation Act requires digital asset exchanges to register with the CFTC. It places assets that provide financial interest to owners in a business entity under the jurisdiction of the SEC. Absent from this bill is what constitutes a security or commodity, which the SEC can help clarify.
The SEC has issued enforcement against crypto projects for offering unregistered securities, without additional guidance on how the projects can comply with securities laws. SEC Commissioner Hester Pierce recently said in a Bankless podcast that the SEC should regulate capital raising.
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