Cryptocurrencies, blockchain, NFT and new trends

Congress needs to put U.S. regulators on same page for crypto, says CFTC commissioner

Policy • March 21, 2023, 11:54AM EDT

Quick Take

  • Regulators need to work together to craft a regulatory framework for crypto, but they may need a hand in the form of a legislative mandate, CFTC Commissioner Summer Mersinger said.
  • The CFTC and SEC hold different views over how to define some digital assets. 

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The Commodity Futures Trading Commission and the Securities and Exchange Commission need Congress to tell them to sit down and work together to craft a regulatory framework for digital assets, a CFTC commissioner suggested on Tuesday. 

The agencies can work on that framework now without legislative authority, CFTC Republican Commissioner Summer Mersinger said on Tuesday at the DC Blockchain Summit. But she doubted they could reach an agreement without a new law compelling them to work together. 

“Do I think that’s going to happen on its own? No,” said Mersinger. “I think we would need probably some sort of legislative mandate to force us to sit down.” 

SEC, CFTC hold different crypto views

Mersinger’s comments echo CFTC Chair Rostin Behnam’s call for legislation. The CFTC and the SEC have different views over their approach to digital assets, and the two agencies are in public disagreement over how to define ether, the second-largest digital currency by market capitalization after bitcoin. 

Behnam has repeatedly said he views the digital currency as a commodity, and the agency has allowed for the self-certification of ether derivatives, creating an official agency stance that ether is a commodity. Meanwhile, SEC Chair Gary Gensler has said that he sees proof-of-stake digital assets, like ether, as securities, because staking creates an expectation of return. New York Attorney General Letitia James has also argued that ether is a security in a separate enforcement case against the trading platform KuCoin. The only certainty right now is around bitcoin, which both federal agencies see as a commodity. 

During the public appearance, Mersinger and one of her Democrat colleagues on the CFTC, Commissioner Kristin Johnson, were also asked about how cryptocurrency intermediaries are defined.  

Johnson said she wants safeguards among intermediaries, such as segregating customer assets and cyber risk safeguards, two areas in which the SEC has proposed new rule changes that would apply to the digital asset industry, as well as traditional financial firms. 

“We’ve seen too many examples of the failure of that infrastructure to be effectively established and robustly overseen by internal sources even ahead of our engagement,” Johnson said at the event.