SEC’s Gary Gensler Supports CFTC Assuming Authority over Bitcoin

UTC by Tolu Ajiboye · 3 min read
SEC’s Gary Gensler Supports CFTC Assuming Authority over Bitcoin
Photo: Third Way Think Tank / Flickr

Following August’s proposed senatorial crypto bill, Gensler signals a willingness to aid the CFTC in overseeing Bitcoin.

Securities and Exchange Commission Chairman (SEC) Gary Gensler recently expressed support for the Commodity Futures Trading Commission (CFTC) having oversight over Bitcoin (BTC). Gensler says he is ready to support Congress handing more authority to the US derivatives markets regulator. Speaking at the SEC Speaks industry conference on Thursday, the SEC chief said:

“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.”

In addition, Gensler, who headed the CFTC for six years, stated that regulating bodies must work together on crypto-related matters. Chief among these suggested collaborations is establishing clear policies regarding crypto technology and investments to protect investors.

Although Gensler is willing to see the CFTC assume prime oversight over Bitcoin, the American government official has a proviso. According to him, this CFTC oversight should occur provided it does not undermine or overlook the power of the SEC. In Gensler’s own words:

“Let’s ensure that we don’t inadvertently undermine securities laws. We’ve got a $100 trillion capital market. Crypto is less than $1 trillion worldwide. But we don’t want that to somehow undermine what we do elsewhere.”

Furthermore, the SEC chief also added that “the securities laws have made our capital markets the envy of the world.”

Gensler CFTC Bitcoin Stance Follows Digital Commodities Consumer Protection Act Proposal

Gensler’s latest remarks come after a group of bipartisan lawmakers introduced a bill that pushes for the CFTC to oversee BTC and Ether (ETH). According to the authors, Senators Debbie Stabenow and John Boozman, both digital currencies are commodities and should be treated as such. The duo introduced the proposed legislation, dubbed the Digital Commodities Consumer Protection Act, in early August. Since then, a faceoff between relevant congressional committees and federal agencies over who will regulate crypto, has intensified.

Still, on this matter, Gensler’s stance regarding the status of some of these digital currencies comes off as arbitrary to some. For instance, although the SEC chair is unequivocal about Bitcoin being a commodity and not a security, he seems less clear on ETH. This leads many to believe that Gensler wants to bring the prominent altcoin under the SEC’s control. For example, crypto lawyer Jake Chervinsky is one of those who subscribe to this opinion of Gensler’s Ether intentions. Chervinsky took to Twitter to explicitly express his views regarding the matter.

The crypto industry is by and largely unregulated by the federal government, which leaves investors somewhat confused. For instance, the absence of adequate regulation makes the market vulnerable to manipulation. In addition, crypto investors are also generally unprotected from the increasing levels of fraud and malpractices associated with the industry.

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