The contradictory regulation strategies between the SEC and the CFTC have an unusual answer, as per to Ripple CTO David Schwartz.
On March 28, Schwartz urged the two organizations to "battle out among themselves" to decide which should oversee the cryptocurrency sector. The CTO's suggestion emphasizes the rising dissatisfaction with the regulatory ambiguity and the requirement for an industry-specific regulatory framework.
CFTC Sues Binance, CZ Over 'Willful Evasion' of U.S. Laws, Unregistered Crypto Derivatives Products 👀👀👀 https://t.co/feDyBdgXFZ via @coindesk
— 🇳🇱 MackAttack XRP 🇳🇱 58K-Followers (@MackAttackXRP) March 27, 2023
The situation has become even more convoluted as a result of the CFTC's recent action against Binance, one of the biggest cryptocurrency exchanges in the world. While only Bitcoin is excluded from the SEC's definition of a security, the CFTC classed Bitcoin, Ethereum, and Litecoin as commodities. The regulatory status of other digital assets at the lower end of the crypto spectrum has come under scrutiny as a result of this difference.
SEC Chairman Gary Gensler recently suggested that Ethereum (ETH) and other proof-of-stake (PoS) currencies should be governed as securities, which only served to fuel the flames. This goes against the assertion made by CFTC Chairman Rostin Behnam that PoS tokens ought to be considered commodities. The regulatory environment for cryptocurrencies has become more complex as a result of the differing opinions on the regulatory status of digital assets.
It would be helpful to define the legal environment for digital assets, thus Schwartz's suggestion of a regulatory showdown between the SEC and the CFTC is intriguing. It is yet to be seen if the two agencies will adopt Schwartz's recommendation and how it will be put into practice. It will be interesting to see how the plan evolves over the next few weeks and months given the amount of interest and attention it has received from the crypto community.
