Yesterday, the Commodity Futures Trading Commission (CFTC) issued proposed rules aiming to support digital asset innovation while protecting investors. Crypto proponents view the digital asset sector as key to the US maintaining its global leadership in financial services. Multiple jurisdictions worldwide have begun or already established crypto rules.
The CFTC’s move follows a similar approach by the Securities and Exchange Commission and arrives after the failure of the CLARITY Act, which died in the Senate after all Democrat members voted against it, guaranteeing its demise.
CFTC Chairman Michael Selig said the agency is taking critical steps to ensure the US remains the crypto capital of the world. Selig said the public deserves the certainty and protections provided by a uniform national regulatory framework.
“The Commission’s announcement begins our process of new rulemakings grounded in the CEA’s purpose and President Trump’s directive to propose a federal crypto asset regulatory market structure using the CFTC’s existing statutory authorities. Under my leadership, the Commission will take every necessary step to establish regulations that are designed to prevent, rather than only prosecute after the fact, fraudulent schemes such as FTX,” said Selig.
He also pointed to the collapse of FTX, which was once a major crypto exchange and hedge fund that skirted rules while operating beyond regulators’ reach.
The proposed rulemaking, Regulation CTX and Regulation CAM, requests public feedback before a final rule.
Regulation CTX would define which crypto deals are deemed to be covered “Crypto Asset Transactions.”
Regulation CAM seeks to support market structure so crypto transactions can actually be listed. It would create a subcategory of designated contract market — a Crypto Asset Market, or CAM — with core principles. Existing DCMs could also list these products under current registration.
In opposition to the CFTC’s move to update regulations for the crypto sector, advocacy group Better Markets slammed the CFTC’s move to codify crypto regulations. Benjamin Schiffrin, Director of Securities Policy for Better Markets, declared:
“The CFTC and the SEC are competing to see which agency is most subservient to the crypto industry. Just last week, the SEC proposed an entirely new regulatory regime for the custody of crypto assets that subjects such assets to weaker rules than traditional securities. Today, the CFTC indicated that it wants to adopt new rules to legitimize crypto assets and give the crypto industry what it has long desired—pushing aside the SEC, which was the global gold standard for investor protection—and putting the CFTC, the least funded, least capable, and most easily capturable regulator, in charge, resulting in the appearance but not the reality of actual investor protection regulation. It purports to do this by treating various crypto transactions as if they were futures contracts. The problem is [that] crypto is not like futures. “
Continuing his diatribe, Schiffrin hammered crypto in general:
“Chair Selig also says that these rules will help make the US the crypto capital of the world. Yet he does not explain why that is a good thing. For example, the US is not the cocaine production capital of the world, and no one is complaining—for good reason. Crypto—after 18 years of effort and innumerable disproved and baseless claims—still lacks any real-world use case. It is used either purely for speculation or for criminal purposes.”
Schiffrin added that the “CFTC is the wrong agency to regulate transactions involving crypto assets by retail customers.”
Better Markets is a non-profit with a well-established left-leaning perspective. Climate and other ESG issues are areas of pursuit, along with nebulous “social justice” ambitions. The group touts its voice as “standing up to the lawless crypto industry,” explaining that they continue to “track, highlight, and oppose these harmful and aggressive actions and continue to stand up against the crypto tidal wave of money that threatens to overwhelm vital consumer and economic protections. ” The GENIUS Act, stablecoin legislation, is viewed as “reckless.”
Tyler Winklevoss, founder of Gemini Space Station (NASDAQ:GEMI) took to X to share his opinion as to why Better Markets is hostile toward the crypto industry:
“Better Marxists hate crypto because they hate individual freedom and self-sovereignty. They want to control you and your money. They are anti-innovation and anti-American and that’s why they will lose and we will win. Onward!”