SEC Commissioner Hester Peirce and CFTC Commissioner Caroline Pham have partnered on an Op-Ed published this week in the Hill calling for progress on the regulation of decentralization.
Alluding to possible friction between the two agencies as regulators jostle as to which sector of crypto is handled by who, the two Commissioners say there is an “eagerness” within both the SEC and CFTC to regulate crypto, and now is the time to work together and get things moving.
To quote the article:
“… the CFTC regulates the commodity derivatives markets, and the SEC regulates the securities markets. But the jurisdictional lanes aren’t always clear. Our two agencies accordingly have had some rough patches in their relationship, but also have found ways to work together. For example, under former SEC Chairman Jay Clayton and former CFTC Chairman Heath Tarbert, in 2020, the two agencies held their first joint open meeting to vote on a shared rule and issue a request for comment. That meeting came after several years of intense cooperation between the two agencies…”
Peirce and Pham recommend the discussions commence on the topics of crypto marketplaces, DeFi, stablecoins, and crypto derivatives. Each of these sectors is opaque when it comes to the rules. At the same time, the entire industry wants regulation but not regulation by enforcement – the currently preferred option of the SEC.
Meanwhile, draft legislation is circulating on Capitol Hill that may provide a clearer path to establishing bright-line rules – hopefully, ones that empower innovators while providing sufficient investor protection.