It has been stated that three separate measures in the United States Congress would have the Commodity Futures Trading Commission (CFTC) regulate the cryptocurrency spot market.
Spot Market for Cryptocurrency to Be Overseen by CFTC
In 2022, three separate measures have been presented to make the CFTC the authority on the spot market for digital assets. The Securities and Exchange Commission (SEC) vs. the Commodity Futures Trading Commission (CFTC) is an age-old point of contention regarding which agency is better equipped to regulate the spot market.
Kristin Smith, CEO of the Blockchain Association, thinks this is great news for the digital asset sector. The CFTC is designated as the overseer in the proposed legislation from both the Senate and the House.
The “Digital Commodities Consumer Protection Act of 2022” was pushed through by a bipartisan group of four senators in July. Legislators claim that the bill grants the CFTC exclusive authority over the cryptocurrency spot market. This is being done for the sake of customer security and the continued health of the market, as well as the promotion of creative new products.
The “Responsible Financial Innovation Act” was proposed in June by Senators Cynthia Lummis and Kirsten Gillibrand. According to the legislation, the CFTC is now responsible for spot market regulation. Legislators clarified that the Commodity Futures Trading Commission (CFTC) has jurisdiction over Bitcoin and Ethereum since these cryptocurrencies share characteristics with commodities.
Tom Emmer, Glen Thompson, Darren Sotto, and Ro Khanna sponsored the “Digital Commodity Exchange Act of 2022” that was also introduced in April. The law, they claim, will help the United States become a global leader in innovation and technology. A regulated trading environment that prioritizes the safety of its customers is also required.
The CFTC is given broad authority over the cryptocurrency spot market in all the proposed laws. Thus, the question of whether or not the SEC is the appropriate body to regulate the spot market has been settled.
The Expanding Role of the CFTC in Cryptocurrency Regulations
The CFTC’s (Commodity Futures Trading Commission) involvement in monitoring the cryptocurrency business is expanding. It is the job of this commodities-focused organization to oversee the monetary aspects of trading digital assets on the commodity market.
The CFTC wants more authority because of the growing crypto sector, according to commission head Rostin Behnam. An increased CFTC presence is warranted due to the increasing volatility and commodity prices in the business.
The commission’s initial responsibility is to regulate agricultural goods, but its function will shift as the economy develops. Behnam said that the CFTC’s knowledge was vital because of the unique challenges posed by the development of digital asset technology.
Some American cryptocurrency exchanges, meanwhile, support granting the CFTC more authority than the SEC. SEC chairman Gary Gensler also reaffirmed that cryptocurrencies are securities because of the way they are traded.
In general, the planned increased involvement of the CFTC in crypto rules will limit the SEC’s ability to penalize crypto service providers.