Former CFTC chair proposes a means for unifying crypto regulation from divided SEC and CFTC


J. Christopher Giancarlo, the former chairman of the Commodity Futures Trading Commission, has an idea for unifying cryptocurrency regulation in the U.S.

On January 4, the American Enterprise Institute, a D.C.-based policy think tank, hosted a panel including Giancarlo and representatives from Coinbase, Coin Center and the DeFi Education Fund.

Representing Coinbase was Kara Calvert, who joined the crypto exchange as Head of Policy in November. During the panel, Calvert restated Coinbase's earlier proposal for a single regulator for digital assets. "It's not crazy to think about a single regulator," she said, though seemed to back down from the earlier sentiment to make such a regulator de novo

 “They’re absolutely right that there should be a single regulator," Giancarlo followed up. “At the end of the day, you can’t have multiple regulators.” 

His proposal? As Giancarlo put it: "Take the ad-hoc cryptocurrency working group that I and Jay Clayton created between the CFTC and SEC and develop it into a bureau, a crypto bureau, which would have joint parentage of the SEC and the CFTC. But it would have its own authorization and its own financing coming from the two committee structures [of the Banking and Agriculture Committees].” 

Giancarlo further envisioned that that bureau would combine the respective mandates of the two commissions and feature a leader of that crypto bureau who, like leadership of those two commissions, is appointed by the president rather than hired by the commissions.

The CFTC and the larger Securities and Exchange Commission have been fighting a turf war over crypto market regulation for years. It has only intensified under the Biden administration, where SEC Chair Gary Gensler has asserted an ever-widening circle of authority over crypto products.

Meanwhile, Giancarlo's recently confirmed successor Rostin Behnam is fighting to maintain the CFTC's respective claim to jurisdiction over crypto. As Giancarlo phrased it, “That battle’s not going away. The SEC’s not going to run from this. The CFTC is not going to yield.”

Indeed, there has been growing talk of expanding the CFTC's regulatory authority — typically reserved for futures markets — into spot markets for cryptocurrencies. Recent legislation has also aimed to formalize and mandate such a working group between the two agencies. 

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May 5, 2022, 3:17PM UTC