In a recent article in The Wall Street Journal, the two former chairs of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have warned regulators to work together to create clear and consistent rules for the cryptocurrency industry. called.
Jay Clayton, who led the SEC from 2017 to 2020, and Timothy Massad, who headed the CFTC from 2014 to 2017, argued that the current regulatory approach based on enforcement actions was inadequate and inefficient to protect investors and ensure market integrity.
The two names wrote:
“…enforcement actions by themselves are unlikely to quickly lead to a significant improvement in investor protection and market integrity.”
Instead, they suggested that the SEC and the CFTC jointly develop core investor and market protection standards for trading platforms, which are the main channels for trading cryptocurrencies. They suggested that institutions could act directly or delegate their authority to a self-regulating body such as FINRA, which oversees brokerage firms.
Clayton and Massad added:
“…The SEC and CFTC should jointly develop core investor and market protection standards for trading platforms… institutions can shift funding responsibility to the industry, acting directly or through a self-regulatory agency.”
They also recommended that Congress pass legislation to clarify the powers and responsibilities of the SEC and CFTC over cryptoassets and provide adequate resources and funding for regulators.
*Not investment advice.