According to Fox Business reports, the incoming Trump administration hopes to expand the powers of the Commodity Futures Trading Commission (CFTC) to authorize it to regulate the $3 trillion digital asset market.
What are the jurisdictions of the CFTC and SEC?
The Commodity Futures Trading Commission (CFTC) is an independent federal agency authorized by Congress to regulate the U.S. derivatives markets, valued at approximately $20 trillion, which includes futures, options, and the trading of physical commodities such as gold, oil, and wheat. The mission of the CFTC is to protect market participants and the public from fraud, manipulation, and abusive practices, and to promote open, competitive, and financially sound futures and options markets.
In U.S. cryptocurrency regulation, there is often a gray area of jurisdiction between the SEC and the CFTC; for example, the CFTC Chairman believes that Bitcoin and Ether are commodities and should fall under CFTC jurisdiction, but the SEC argues that cryptocurrencies with security characteristics fall under SEC jurisdiction, and that most tokens, aside from Bitcoin, are classified as securities.
Due to the uncertainty in the classification of digital assets and the unwillingness of either the SEC or CFTC to establish specific rules, both agencies have resorted to regulatory actions in the field. Under Gensler's leadership, the SEC has led a three-year industry-wide crackdown to strengthen his view that most cryptocurrencies, other than Bitcoin, are securities, which has made him and the SEC largely unpopular in the U.S. crypto industry, which tends to favor the CFTC as the primary regulatory body.
Will the jurisdiction over digital assets belong to the CFTC?
Former CFTC Chairman Chris Giancarlo told Fox Business: With adequate funding and the right leadership, I believe the CFTC can start regulating digital commodities on the first day of Trump’s presidency.
Granting the CFTC regulatory authority over the spot markets for Bitcoin and Ethereum (which together account for 70% of the global crypto market) and potentially other tokens considered to be digital commodities, will also empower it to regulate trading platforms for these assets. If implemented, this move will mark an important step in providing regulatory clarity for companies and individuals participating in the trading of the two largest cryptocurrencies by market capitalization, as there is currently no regulatory body with clear jurisdiction over these spot market trades.
Chris Giancarlo may serve as the 'Crypto Czar'
65-year-old Giancarlo served as the Chairman of the CFTC during Trump’s first term in the White House. He has long called for his CFTC to play a greater role in the regulation of digital currencies. Under Giancarlo's leadership, the CFTC approved the first Bitcoin futures trading product in the United States.
He has been a key member of the new Trump transition team, which promises to provide a more favorable regulatory environment for cryptocurrencies and potentially revolutionary blockchain technology, thereby facilitating the use of digital assets for transactions.
Trump's team is considering establishing a new position in the White House dedicated to cryptocurrency policy, and Giancarlo, who has credentials from Washington D.C. and a deep understanding of policy implementation, is currently a possible candidate, with the market affectionately referring to this position as the 'Crypto Czar.'
(New Hope for Trump: White House to establish new cryptocurrency policy position, Brian Brooks as SEC Chair candidate?)
This article 'Crypto New Hope? Trump Team Considering Transferring Cryptocurrency Regulatory Authority to the CFTC' first appeared on Chain News ABMedia.
