Commodity Futures Trading Commission Commissioner Brian Quintenz argued that cryptocurrencies are commodities that his agency regulates.
A day after Securities and Exchange Commission Chairman Gary Gensler called on congress to add to and clarify the SEC’s authority over cryptocurrencies, a commissioner of the Commodity Futures Trading Commission argued that the SEC has no such authority.
CFTC Commissioner Brian Quintenz took to Twitter on August 4, saying, “[j]ust so we’re all clear here, the SEC has no authority over pure commodities or their trading venues, whether those commodities are wheat, gold, oil….or #crypto assets.”
That drew support from Chris Giancarlo, who recently stepped down as Chairman of the CFTC, as well as the Twitter account of the House Agriculture Committee’s Republican members.
Giancarlo called on the Biden Administration to nominate a new chairman to replace him at the agency, tweeting that it is a vital step in creating “sensible cryptocurrency regulation.”
He said: “Only one US regulatory agency has experience regulating markets for #Bitcoin & #Crypto and it is not @SECGov. It is @CFTC.”
Later that evening, the @HouseAgGOP Twitter account said Quintenz was right, adding “#Crypto is bigger than the SEC.”
The tweet also agreed with Gensler’s main point, saying “Congress needs to write the rules of the road to protect investors AND innovation in the digital economy.”
SEC Chair Calls For Clarity
Speaking before the Aspen Security Forum on Tuesday, Gensler argued that while the test to determine if a cryptocurrency is a security — and he believes virtually all are — the SEC needed “additional Congressional authorities to prevent transactions, products, and platforms from falling between regulatory cracks.”
He added that “the legislative priority should center on crypto trading, lending, and DeFi platforms,” and that regulators needed more “authority to write rules for and attach guardrails to crypto trading and lending.”
The problem, Gensler told the Forum audience, is that crypto “is rife with fraud, scams, and abuse in certain applications. There’s a great deal of hype and spin about how crypto assets work.”
He added that “in many cases, investors aren’t able to get rigorous, balanced, and complete information.”
Beyond that, Gensler warned that “large parts of the field of crypto are sitting astride of — not operating within — regulatory frameworks that protect investors and consumers, guard against illicit activity, ensure for financial stability, and yes, protect national security.”
He also noted that crypto’s use as currency — the goal of Bitcoin’s anonymous creator, Satoshi Nakamoto — was rare.
To the extent that crypto is used to buy things, “it’s often to skirt our laws with respect to anti-money laundering, sanctions, and tax collection,” Gensler warned. “It also can enable extortion via ransomware, as we recently saw with Colonial Pipeline.”
