According to Fox News reports, the Trump administration may hand over a large portion of the $30 trillion cryptocurrency market to the CFTC for management.
This situation is actually a huge positive for crypto; Old Wang will detail it for everyone.
The full name of the CFTC (Commodity Futures Trading Commission) is the Commodity Futures Trading Commission, which mainly manages the market for commodity futures, options, and swaps (such as futures contracts, swaps, etc.).
The full name of the SEC (Securities and Exchange Commission) is the Securities and Exchange Commission. It is responsible for regulating the securities market, including stocks, bonds, and crypto assets considered investment contracts (such as ICOs).
The soon-to-resign SEC Chair Gary Gensler once stated: Bitcoin is not a security, but a commodity under the jurisdiction of the Commodity Futures Trading Commission (CFTC). He also mentioned, 'Everything other than Bitcoin is a security.'
But for now, what he says doesn't count, haha.
Who is the best to regulate crypto?
Generally speaking, the CFTC's regulatory style is quite lenient, as you can't make commodities like gold and silver produce various financial reports.
The SEC is often very strict, requiring projects to register and provide detailed information disclosure, which leads to high compliance costs.
From the results, if the CFTC becomes the main regulator of the market, it tends to view most crypto assets as commodities unless there is clear evidence that these assets should be treated as securities.
What does clear evidence mean?
Actually, the House passed a bill called FIT21 this year, which will take effect if the Senators also pass it and President Trump does not oppose it.
This bill establishes the criteria for determining whether cryptocurrencies are securities, in addition to the traditional Howey Test, new criteria specific to crypto include:
If the management and control of a project or asset are sufficiently decentralized, to the extent that it no longer relies on a small group or individual to generate profits or value appreciation, it is unlikely to be considered a security.
If digital assets are primarily used to access or use specific networks or services (such as paying transaction fees, participating in network governance rather than investing), they are more likely to be viewed as commodities rather than securities.
If a project operates through a DAO (Decentralized Autonomous Organization) or similar decentralized governance mechanism, it may reduce the likelihood of being classified as a security.
If these criteria are applied, most VC coins could be considered not securities, and it wouldn't affect their listing on NASDAQ, just discovering a commodity ETF is enough.
I wonder if next year's altcoin season will open in this way.
