In a crypto-focused interview with CNBC, the US Commodities Futures Trading Commission boss has clarified its stance on cryptocurrencies, and its regulatory relationship with the SEC.
In a brief but illuminating interview with CNBC’s Fast Money, CTFC chairman Christoper Giancarlo, has said his organisation believes that cryptocurrencies are “here to stay,” defended the role of US regulators in the cryptocurrency market, and clarified the seeming discrepancy between its stance and the much more conservative take on the space seen from the Securities Exchange Commission.
When asked whether regulators were holding back innovation in crypto, he responded by asserting that “It’s the United States that’s gone forward with the very first Bitcoin derivatives, with Bitcoin futures trading on the CME [Chicago Mercantile Exchange], and also Bitcoin Options and Bitcoin clearing.”
He then added that “there’s no questions that America is leading in some areas, but there are other areas of innovation where I think it make sense for us to takee a little bit more of a thoughtful and intelligent approach, in the same way as the US congress did in the early days of the internet.”
On the seemingly patchwork regulatory structure overseeing the cryptocurrency market – which broadly sees the CFTC oversee cryptocurrencies in terms of their role as a commodity that can be traded, and the SEC oversee tokens in their potential capacity as securities as well as investment opportunities linked to the crypto market – Giancarlo lamented that “we’re old agencies, our statutes were written in the 30s,” before saying the two bodies were “trying to repurpose for a new innovation that didn’t exist when these statutes were written.”
He then pointed out that “broadly, the SEC’s oversight is over capital formation markets with a big retail focus,” whereas the CFTC focuses on “on risk transfer markets… we’ve always focused on derivatives, and a lot of that is institutional trading.”
This means, he concluded, that “we’re focused on institutional investment and they’re focused on retail – different orientation, different history, so we do come at these things with a different perspective.”
His overriding view, though, is that “Cryptocurrencies are here to stay,” with a possible use case being as a store of value and currency for those who do not benefit from a stable local currency.
“I’m not sure they ever come to rival the dollar, or other hard currencies,” he said, “but there is a whole section of the world that is hungry for a functioning currency that they can’t find in their local currency…
“We’re taking not two years down the line, maybe 10.”
You can see his full interview here…
— CNBC’s Fast Money (@CNBCFastMoney) October 1, 2018
Just last week the CTFC won Federal court backing confirming its position that cryptocurrencies are commodities, thus making it the de facto arbiter of rules governing the cryptocurrency sector. In that case, Federal judge Rya Zobel ruled that the CFTC should have oversight of cryptocurrency fraud cases, allowing the agency to proceed with a $6 million case against My Big Coin Pay Inc., which claimed to sell a gold-backed cryptocurrency and allegedly defrauded 28 investors.
The company’s lawyers had argued that the CFTC had no authority to pursue the case because My Big Coin was not a “tangible good nor a service on which future contracts are traded”, according to Reuters.
But Judge Zobel said that the cryptocurrency did fall under the broad definition of a commodity and ruled that because Bitcoin futures are now trading on American exchanges, the CFTC should continue to regulate on all cryptocurrencies in the US. , though there still remains doubts about the intersection between their twin roles as an tradable asset when used as currency and as securities in the case of many ICOs and other concerns – such as in the muddy relationship between Ripple and XRP.