Following the call for further laws to oversee the operations of the crypto industry, the chairman of the Securities and Exchange Commission is urging the agency’s staff to collaborate with the CFTC to ensure a well-regulated digital asset industry.
The SEC has been battling several crypto exchange platforms over what the regulatory body perceives to be non-compliance with existing regulations. The commission chair wants the staff to collaborate extensively with the CFTC to ensure the crypto industry is well regulated.
The SEC Seeks Partnership with the CFTC over Crypto Exchange Regulation
Gary Gensler on Monday discussed the need for further regulation of the industry at an event he attended at the University of Pennsylvania Law School.
According to the SEC chief, the primary responsibility of the SEC is to oversee the activities of the capital market. The SEC’s main area of interest is controlling financial institutions, digital or fiat.
The mandate is to protect investors, ensure robust capital formation, and maintain an organized and orderly market.
And the emergence of digital financial assets has expanded the scope of influence of the SEC as it looks to regulate crypto platforms and crypto-related products and services.
However, the SEC chief noted that he sees no apparent reason to treat the digital asset industry differently from the other sectors. As such, the commission staff is expected to key into the vision of the SEC by knowing how to regulate securities and non-securities trading, as both terms are synonymous with one another.
Meanwhile, as a matter of priority, the staff must collaborate with the CFTC on how best to address platforms engaged in crypto-related transactions using the powers vested in the authorities to carry out their mandate.
However, the chairman also emphasizes the need for more strict regulations to oversee crypto exchange platforms considering the risks retail investors face due to scams and cunny market antics.
Lawmakers Keen on Broad Regulations
It was recently reported that two U.S. senators named, Kirsten Gillibrand and Cynthia Lummis revealed their plan to introduce a holistic regulatory framework for the crypto industry. According to the newly proposed framework, both agencies will handle some parts of the regulations, which would be duly communicated.
According to Senator Lummis, the CFTC will specifically handle the bulk of the role under the new guidelines for the cryptocurrency industry. The Senator further added that both Bitcoin and Ethereum are commodities, and she sees no reason why they would not be regulated.
Previously, both Gensler and the head of the CFTC had been urged by Lummis last August to create a functional unit for regulating crypto assets in the U.S.
The SEC is yet to take the rules to the crypto industry despite being involved in high-profile cases in court against some big players like Ripple, Elon Musk, and others.
Once the proposed regulation is achieved, it will set the tone for further industry rules, and the possibility of lawsuits between regulatory bodies and industry players is high.