- The SEC and the CFTC will work together to regulate some crypto exchanges
- The SEC will oversee regular crypto exchanges while the pair will work together on those that also list security and commodity tokens
- The Biden administration has put crypto regulation near the top of its list of priorities
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) will buddy up to regulate aspects of the cryptocurrency ecosystem, according to SEC head Gary Gensler. In a virtual address yesterday, Gensler said that the SEC would stick to regulating crypto-only platforms while the CFTC would help out with platforms that trade both crypto-based security tokens and commodity tokens. The distinction forms part of the SEC’s work to effectively regulate the crypto markets on the orders of the Biden administration, which recently revealed its desire to help the space flourish in the country.
Division of Regulatory Labor Becoming Clearer
The division of labor within the U.S. crypto regulation arena has been a topic of debate for years, but it has become even more heated in the last three years, with various external factions calling for tough regulation of the crypto Wild West and those inside the crypto space calling for sensible regulation that allows the space to grow rather than hampering its development.
Of course, how this will play out in practice will be the litmus test, and there are still the practical ramifications of the Infrastructure Bill to factor into lawmaking in the crypto space.
Crypto Gets Equal Treatment
Three weeks ago, president Joe Biden published an Executive Order that urged regulators to “protect consumers, investors, and businesses in the United States” and “support technological advances that promote responsible development and use of digital assets.”
This friendly tone seems to have filtered down to the regulators themselves, with Gensler striking a balanced tone that seeks to treat cryptocurrency markets in the same way as traditional markets rather than being unnecessarily tough on them.
Hopefully this attitude carries over into practice as well as theory.
