The former chairman of the Commodity Futures Trading Commission (CFTC), J. Christopher Giancarlo in an interview with Yahoo Finance has advised that the CFTC should regulate cryptocurrency trading and not the Securities and Exchange Commission (SEC)or the United States Treasury.
In the interview, Giancarlo gave a clear-cut divide between the U.S. SEC and CFTC pointing out that, “the SEC regulates securities which are capital formation instruments while the CFTC regulates derivatives, which are risk transfers/risk allocation instruments,” hence tasked with mitigating against “the risks of prices of commodities going up and down”. A function that qualifies it to manage and regulate cryptocurrencies.
While discussions are currently going on at the White House as to the measures to be taken to properly regulate digital tokens, the former CFTC chairman in his opinion believes that it is time for Congress to allow his former agency to take the lead as it pertains to the regulation of the nascent asset class.
It is worthy of note that a coalition of agencies, the Securities and Exchange Commission as well as the Treasury has joined forces with the Department of Justice and the FBI to run its regulation business.
If the recommendation of J. Christopher Giancarlo pulls through as per CFTC taking the lead in crypto regulations in the U.S, it can stir institutions in the retail market to expand, he further pointed out that stakeholders in the industry;
“Would have a well-established federal regulator overseeing those markets, and looking after things like consumer protection, and adequate funding and protections against fraud and manipulation of those markets.”
Added to his pitching for the CFTC, the ex-chairman also recommended an industry watchdog by an SRO (self-regulatory organization) to ensure proper regulation, as well as facilitate the classification of crypto as financial instrument.
In a press release on the website of CFTC last week, the current chairman of the Trading Commission, Rostin Behnam had made a similar recommendation with that of Christopher Giancarlo, sighting that the United States Congress is poised to be the final judge of these calls regulations.