Crypto exchange Coinbase believes the US Commodity Futures Trading Commission (CFTC) should be granted full authority over spot cryptocurrency markets — a move that could significantly diminish the Securities and Exchange Commission’s (SEC) role in the digital asset sector.
Coinbase’s chief policy officer, Faryar Shirzad, penned a two-page proposal urging Congress to act swiftly in ushering in regulatory clarity and consumer protections for crypto users.
Shirzad outlined six legislative priorities, including granting full spot market authority to the CFTC.
“Digital assets like Bitcoin and Ethereum are commodities, not securities. Legislation must empower the Commodity Futures Trading Commission (CFTC) to oversee the crypto spot market, ensuring transparency and protecting consumers from fraud and manipulation,” wrote Shirzad.
Although such a move would greatly diminish the SEC’s regulatory powers over digital assets, Shirzad said the agency still has an important role to play.
The Coinbase official said Congress must “create SEC rules for capital raising,” which would provide developers with “clear pathways to raise capital for blockchain projects without every token being treated as a security.”
Faryar Shirzad’s six-point legislative priorities for crypto. Source: Sanity.io
Handing over regulatory oversight to the CFTC is generally supported by the crypto industry and several Republican lawmakers. For example, in 2022, Representatives Glen Thompson and Tom Emmer reintroduced the Digital Commodity Exchange Act, which would have authorized the CFTC to register and regulate the digital asset sector.
Meanwhile, former CFTC Chair Chris Giancarlo tried to convince the Senate Agriculture Committee overseeing the CFTC to support the agency’s oversight of spot crypto markets. As Cointelegraph reported, President Donald Trump is strongly considering handing the CFTC oversight of the sector.
Source: Chris Giancarlo
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Wrestling control from the SEC
Currently, spot crypto markets are regulated by the SEC. The agency has ruled that Bitcoin (BTC) and Ether (ETH) are not securities, but the same cannot be said of most crypto assets.
In early 2023, former SEC Chair Gary Gensler famously quipped that all cryptocurrencies except Bitcoin fall under the agency’s purview. Besides Bitcoin, crypto projects “are securities because there’s a group in the middle and the public is anticipating profits based on that group,” he said at the time.
Gensler even investigated whether Ether should be deemed a security before dropping the case entirely in June 2024, possibly to avoid another embarrassing defeat, according to Carol Goforth, a professor at the University of Arkansas School of Law.
Dawning of a new era? “Crypto Mom” Hester Peirce was named head of President Trump’s SEC Crypto Task Force. Source: Cointelegraph
Nevertheless, the SEC has taken a much more accommodating approach to crypto asset regulation since the election of President Trump. In February, the agency’s newly created Crypto Task Force met with several firms to clarify broker-dealer and staking rules, among other priorities.
Related: Trump’s crypto ventures raise conflict of interest, insider trading questions