Two officials at the Commodity Futures Trading Commission (CFTC) spoke about regulating cryptocurrencies this week, stressing the need for cooperation between their agency and another powerful U.S. regulator, the Securities and Exchange Commission (SEC).
Addressing the FIA Law and Compliance conference in Washington, D.C. on Wednesday, commissioner Brian Quintenz spoke out about "an effort that is underway at both the SEC and CFTC to coordinate and harmonize regulatory oversight."
Quintenz did not focus on cryptocurrencies specifically, but when he did talk about them, the emphasis was on "fraud, market manipulation and disruptive trading involving virtual currency."
He reminded the audience that the CFTC has set up a special task force "to prosecute fraud in this evolving asset class," and stressed the importance of cooperating with the SEC so as to "ensure that differences in product nomenclature do not enable bad actors to slip through jurisdictional cracks."
Commissioner Rostin Behnam, who spoke Thursday morning, struck a much softer tone on cryptocurrencies. He noted that CME Group and Cboe's introduction of bitcoin futures required a "hard and fast introduction" to bitcoin and blockchain technology.
He expressed concern that cryptocurrencies could present a threat to financial stability, if not now then down the line. He urged regulators – who often find themselves "scurrying to keep pace with swift innovations" – to act before that threat appears.
Behnam acknowledged that not everything in the cryptocurrency markets is a fraud and said that policy should "reflect an understanding of FinTech and address the concerns and needs of all stakeholders."
The commissioner was skeptical of the cryptocurrency industry's attempt to craft its own regulations, since "their motives may be too focused on supporting industry growth." Even so, he welcomed market participants to help craft policy:
He added: "Whatever your issue, my door is open."
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