U.S. Lawmakers Introduced 3 Bills To Empower The CFTC As A Spot Market Regulator
The United States Congress has announced that three different bills seek to make the Commodity Futures Trading Commission (CFTC) the regulator overseeing the crypto spot market.
CFTC to Manage Crypto Spot Market
So far in 2022, three different bills have been introduced by lawmakers to make the CFTC the regulator of the digital asset spot market. There has been a long-standing debate about the securities and exchange commission (SEC)’s capabilities to handle the spot market over the CFTC.
According to Kristin Smith, the executive director of the Blockchain Association, this is a good thing for the digital asset industry. The Lummis Gillibrand bill, the House bill, and the Digital Commodity Exchange Act all point to the CFTC as the regulator.
In July, four senators drove the implementation of “The Digital Commodities Consumer Protection Act of 2022.” The lawmakers assert that the bill gives the CFTC exclusive jurisdiction over the crypto spot market. This is to protect consumers and ensure market integrity and innovation.
Furthermore, in June, the “Responsible Financial Innovation Act” was put forward by senators Cynthia Lummis and Kirsten Gillibrand. The bill therefore assigned regulatory affairs of the spot market to the CFTC. The lawmakers explained that digital assets with features of a commodity like Bitcoin and Ethereum fall under the purview of the CFTC.
The other bill introduced in April, the “Digital Commodity Exchange Act of 2022,” was sponsored by Tom Emmer, Glen Thompson, Darren Sotto, and Ro Khanna. According to them, the bill enhances America’s innovation and tech growth. It also calls for a transparent trading and regulatory framework focusing on consumer protection and accountability.
All bills call for the empowerment of the CFTC to oversee the entire crypto spot market. This ends the lingering debate over whether the SEC is better suited to regulate the spot market.
The CFTC’s Growing Role in Crypto Regulations
The Commodity Futures Trading Commission’s (CFTC) role in overseeing the activities of the crypto industry is growing steadily. As a commodity-centered agency, its function is to manage the digital asset’s cash in the commodity market.
According to the commission’s chairman, Rostin Behnam, the CFTC seeks additional responsibility in light of the expanding crypto market. The industry’s volatility, coupled with the rising commodities in the space, calls for more effort from the CFTC.
However, the commission’s initial role is to oversee farm products, but its operation changes over time as the economic landscape evolves. The emergence of digital asset technology presents risks and opportunities worth considering, and the CFTC’s expertise is solely needed, Behnam added.
Meanwhile, some crypto exchanges in the U.S. favor giving the CFTC a more significant role over the SEC. For his part, SEC chair Gary Gensler reiterated that cryptocurrencies are securities due to their use of transactions.
Overall, the proposed expansion of the roles of the CFTC in crypto regulations will reduce the SEC’s power to sanction crypto service providers.
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