SEC chair invites CFTC to help regulate crypto exchanges

Crypto regulations in the US have lacked clarity and comprehensiveness. Cryptocurrency exchanges have had difficulty determining the coins to be listed and those not to be listed.

The US Securities and Exchange Commission chair, Gary Gensler, is now inviting the Commodity Futures Trading Commission to work together and find ways to regulate cryptocurrency exchanges.

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SEC & CFTC to work together to regulate crypto

Speaking at the University of Pennsylvania Carey Law School, Gensler said that if SEC staff worked with the CFTC, they would “register and regulate platforms where trading of securities and non-securities is intertwined.”

The SEC’s task is to regulate the securities of companies listed on stock exchanges. On the other hand, the CFTC regulates commodity futures. Futures are contracts that obligate a person to trade a commodity later at a predetermined future price or date.

Despite the roles of the SEC and the CFTC being well-defined, cryptocurrencies have not particularly fallen into any asset class. There has been a debate that some tokens in the crypto space could be securities. Ripple, the company behind the XRP token, is currently entangled in a case where the SEC states that XRP is a security and not a token.

Gensler has previously said that many tokens in the cryptocurrency space were securities but has not specified which those ones are. If the SEC and the CFTC work together, it will remove confusion in the sector, and businesses offering crypto services can operate under a clear regulatory framework.

Clear US crypto regulatory framework

Last month, the US president, Joe Biden, signed an executive order that required federal agencies to work together to regulate the cryptocurrency sector. BY doing this, the US crypto regulatory framework will be transformed and even continue attracting new businesses.

The President of FTX, Brett Harrison, noted that many crypto businesses and products were willing to work with both the SEC and the CFTC if they were assured of being licensed and their products being listed on regulated platforms. “The problem is that there’s not a clear path right now,” he said.