Gary Gensler, Chairperson of the U.S. Securities and Exchange Commission (SEC) says he will back the decision of the Congress to hand over supervision of cryptocurrencies to the Commodity Futures Trading Commission (CFTC). The SEC and CFTC have been at loggerheads, especially with establishing the distinction between securities and commodities when it comes to crypto.
Congress bill to give the CFTC more authority over certain digital assets
The Wall Street Journal revealed the remark on Thursday. According to the WSJ report, Gary Gensler made the comments while speaking at an industry conference Thursday. Gensler mentioned that he is in support of the recent bill from Congress.
The Congress had previously introduced hat would give primary authority over cryptocurrencies to the CFTC. The bill came at a time when the SEC and CFTC were battling over crypto oversight.
According to Gensler, he supports the bill as long as it does not render the SEC powerless in this regard. He specifically mentioned that the CFTC should have authority over “nonsecurity tokens and related intermediaries.” This implies that the SEC should still be allowed to regulate crypto-assets they feel are securities.
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,
Gensler said.
Before joining the SEC, Gensler served as the 11th Chairman of the CFTC from 2009 to 2014 under President Barack Obama.
Battle of supremacy between Gensler’s SEC and the CFTC might continue
Despite the bill from Congress, the battle of supremacy between the SEC and CFTC could persist. While the bill gives the CFTC authority over digital assets considered commodities, it doesn’t add any extra details. The bill only explicitly highlighted Bitcoin (BTC) and Ethereum (ETH) as commodities which the SEC had already classified so.
The bill, however, does require crypto entities dealing on cryptocurrencies considered commodities to register with the CFTC. The decision seemed to appeal to the majority of entities within the crypto space, as the CFTC is known for its favourable policies on crypto. The SEC, not so much.
Should the SEC persist in its practice of classifying assets as securities against the consensus of the rest of the markets, the battle might continue. The SEC has noted the use of the Howey Test to determine if an asset is a security or not. Notwithstanding, an ex-SEC lawyer John Berry previously previously argued against the efficiency of this.
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