US lawmakers intend to force the CFTC and SEC to create a cryptocurrency working group. They convinced that legislators and regulators should work together to create a “balanced” regulation of cryptocurrencies. It should aim to both protect users and promote innovation and prosperity for the cryptocurrency market in the United States, Thompson and McHenry said. In case of refusal, a special decree will be issued.
Letter from Thompson and McHenry
Members of the US House of Representatives sent a letter to the heads of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission; asking them to jointly create a group that would clarify many regulatory issues; and help pass transparent laws related to cryptocurrencies.
In a tweet, House spokesman Glenn Thompson said he sent a letter with spokesman Patrick McHenry to the CFTC and SEC; urging the agencies to “create a joint digital assets working group”. So, Thompson and McHenry asked SEC Chairman Gary Gensler and CFTC Acting Chairman Rostin Behnam to “foster active dialogue” between federal regulators and crypto market participants.
As one of the letter writers Glenn Thompson notes; the cryptocurrency working group will allow the SEC and CFTC to explore how to effectively leverage their current jurisdictions.
“Such a working group can facilitate transparent communication with innovators in the digital asset ecosystem. As Congress is considering additional legislation to address regulatory gaps; this work could provide us with additional information and clarity in making these important policy decisions”.
It is noteworthy that the letter emphasizes the fact; that if the departments do not start independent work on the proposed project; then the appropriate law will soon come into force.
In March, other US congressmen introduced the Remove Barriers to Innovation Bill. So, after its adoption, the SEC and CFTC will need to form a working group within 90 days to assess the current regulatory framework and its adaptation to cryptocurrencies. Thus, Thompson and McHenry believe that agencies should act now, without waiting for the law to come into force.
SEC and CFTC powers to regulate cryptocurrencies
Back in April this year, the House of Representatives approved a bill that was supposed to establish the powers of the SEC and CFTC in relation to cryptocurrency regulation.
“Nothing prevents the SEC and CFTC from carrying out their current activities; but in accordance with the current legislation”, said House spokesman Glenn Thompson.
Many institutional investors lament the lack of clear regulation of the industry in the United States. Because of this, they have little confidence in the cryptocurrency industry as a whole. Currently, the SEC, CFTC and the Financial Crime Network are regulating digital assets in the country; but with different jurisdictional claims, as a result of which companies cannot always cope with the responsibilities that are entrusted to them.
The Securities and Exchange Commission (SEC) often tries to determine whether certain tokens can be classified as securities according to the Howie test. So, a prime example is the long-running legal case with Ripple over their XPR digital asset.