Gensler Gives Go-Ahead For CFTC Having Bitcoin Oversight

Securities and Exchange Commission Chair Gary Gensler has thrown his support behind allowing the Commodity Futures Trading Commission (CFTC) to oversee crypto assets deemed commodities. 

This means that the CFTC would have oversight over crypto assets such as Bitcoin. Gensler has previously stated that Bitcoin is a commodity but has remained tight-lipped about the status of Ether. 

A Surprising Move 

Gensler’s move to allow the CFTC to have oversight over Bitcoin is being seen as a surprising move by those in the industry. However, while speaking at the SEC Speaks event on Thursday, Gensler shed some light on the rationale, stressing that regulatory bodies must collaborate and establish clear regulatory practices around cryptocurrencies to protect investors better. Gensler stated, 

“To the extent, the Commodity Futures Trading Commission (CFTC) needs greater authorities with which to oversee and regulate crypto non-security tokens and related intermediaries, I look forward to working with Congress to achieve that goal consistent with maintaining the regulation of crypto security tokens and related intermediaries at the SEC.” 

The news comes after senators introduced a bipartisan effort from a group of legislators, who introduced legislation that would give the CFTC oversight of Bitcoin and Ether. Senators classify both commodities as commodities. The bill was authored by Senators Debbie Stabenow, D-Mich, and John Boozman, R-Ark, and was introduced in early August. Gensler’s are surprising given they come at a time when federal agencies and congressional committees are vying over who will regulate crypto.

Gensler’s Views On Ether 

Former Director of the SEC’s Division of Corporation Finance, William Hinman, had in 2018 called Ether a commodity. However, SEC chair Gensler has been much less forthcoming about his views on Ether. He has gone on record stating that the only asset he would be willing to classify as a commodity is Bitcoin. Many believe that Gensler is looking to find ways to bring Ethereum under the ambit of the SEC. 

After the news broke, crypto lawyer Jake Chervinsky reported that Gensler still had Ethereum in his crosshairs. 

“This isn’t what the article says. It claims Chair Gensler supports CFTC regulation of cryptocurrencies “such as bitcoin” & quotes him referring to “crypto non-security tokens.” There’s no mention of ETH except in reference to the DCCPA, a bill that he hasn’t expressly supported. For context, there have been rumors for a while that Chair Gensler’s SEC would love to walk away from its June 2018 guidance saying ETH isn’t a security, but they haven’t found a credible way to do that yet.”

There has also been a significant push from the crypto industry and Washington to delegate oversight of the crypto industry to the CFTC. 

Not The First Time SEC And CFTC Have Cooperated

The SEC Chair’s support for CFTC being involved in crypto regulation is not the first time the agencies have seen eye to eye. Back in August, the SEC proposed an amendment to Form PF. The Form PF is the confidential form through which registered investment advisors are required to disclose the necessary information about their security holdings.

The CFTC, on its part, is considering proposing the same set of amendments, requiring funds with $500 million in assets under management to disclose their exposure to crypto assets. Large funds would also be required to report investment concentrations, leverage, and related trading finances. 

SEC Shouldn’t Be Overlooked 

While Gensler was welcoming of Congress potentially giving the CFTC prime oversight over crypto, he stressed that the SEC should not be overlooked, stating, 

“Let’s ensure that we don’t inadvertently undermine securities laws underlying $100 trillion capital markets. The securities laws have made our capital markets the envy of the world.”

Following the news, the bitcoin price jumped by 1.6%, recovering from Wednesday’s slump. 

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. 

Source: https://cryptodaily.co.uk/2022/09/gensler-gives-go-ahead-for-cftc-having-bitcoin-oversight