CFTC Commissioner Stump Decries ‘Oversimplification’ That Crypto Is Either a Security or Commodity

The U.S.’ high commodities regulator primarily oversees derivatives markets, relatively than spot commodity markets, Daybreak Stump, a commissioner on the Commodity Futures Buying and selling Fee’s (CFTC), said Monday.

Stump, who was appointed by then-President Donald Trump in 2018, joined a rising group of regulators debating which federal company ought to regulate the booming digital asset market in the US. 

In her statement, Stump described a “grossly inaccurate oversimplification” that digital property are both securities or commodities that fall underneath the jurisdiction of the CFTC. If they’re deemed to be securities, they’d be regulated by the U.S. Securities and Trade Fee.

As a result of the CFTC doesn’t regulate commodities themselves – solely futures contracts or spinoff merchandise like swaps – Stump mentioned it doesn’t matter whether or not digital property are labeled as securities or commodities, as a result of they wouldn’t fall underneath the authority of the CFTC except a futures or derivatives contract was concerned. 

Earlier this month, SEC Chairman Gary Gensler mentioned that his company ought to regulate a broader phase of the crypto market, together with presumably spot market and exchanges that record any cryptocurrencies that fall underneath securities legislation. In response, crypto-friendly CFTC Commissioner Brian Quintenz tweeted that the SEC has no authority over “pure commodities or their buying and selling venues” – implying that duty belongs to the CFTC.

In her assertion Monday, Stump additionally defined the distinction between the CFTC’s regulatory authority, which Stump mentioned doesn’t apply to digital property, and its broader enforcement authority, which Stump urged does. Utilizing the CFTC’s case towards crypto change and derivatives buying and selling platform BitMEX for example, Stump mentioned the company has traditionally used its anti-manipulation and anti-fraud enforcement authority to guard money commodities.

“As a result of well-functioning futures contracts (and different derivatives merchandise) depend upon a sound underlying money market and should reference money market indexes of their pricing. Thus, the CFTC makes use of this specific enforcement authority to guard the integrity of the derivatives markets that it regulates,” Stump wrote.