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SEC and CFTC May Combine Efforts to Regulate Cryptocurrencies

Bitcoin ETFs are a hot topic with the US regulators. The Securities and Exchange Commission, in particular, has been expected to approve some of the applications for some time now, but it looks like they are trying to avoid it at all costs. Furthermore, most of the applications have been either denied or completely ignored without even the slightest hint of feedback. The applications are long overdue, and the applicants are starting to become restless.

However, the SEC had a ‘meeting’ with the other US regulator called the CFTC (Commodity Futures Trading Commission), it has been reported that the two regulators have shared their opinions about the matter and are ready to partner up to tackle cryptocurrencies.

Comments about the Industry

The ‘Crypto Mom’ (Hester Peirce) herself explained the SEC’s stance towards Bitcoin ETFs. She noted that they have been rather reluctant to sign off on the Bitcoin ETF applications they have been receiving. Although it is not the best type of feedback, it is still better than nothing. So now we know that the applications could be far away from approvals.

>> ICO Scams: FBI Seeks to Educate Investors with Red Flags for ICO Fraud

There is one contradiction about the announcements, however. Peirce noted that there are numerous markets that are not regulated by the SEC, but products are still being developed within them. She also noted that the Bitcoin ETF approach seemed a bit merit-based, which was dangerous. However, it is hard to connect the two statements together. If it is as dangerous as any other unregulated industry, then why are other industries still able to operate but cryptocurrencies are kept lagging behind? These are the questions that most Bitcoin ETF applicants are willing to find an answer for.

The CFTC Commissioner, Brian Quintenz, noted on top of Crypto Mom’s announcement that the CFTC has a pattern when dealing with such a predicament. For example, if there is a side that had an application with the CFTC, the regulator has a specified amount of time to reply with either “Yes, we agree, let’s do it,” or with “No, we disagree and here’s why.” If the CFTC fails to make any of these two answers, then the applicant will have the chance to self-certify, meaning that there will be no involvement from the side of the regulator.

Clashing Ideals

Although both of the institutions are trying to regulate crypto assets, they still have a division in the way they look at them. For example, the CFTC is responsible for Bitcoin and Ethereum directly, and the SEC is more in-tune with the ICO (Initial Coin Offering) market. These two are practically inseparable, that’s just basics of cryptocurrency, meaning that no matter what, if a full regulatory framework is introduced from both sides, a joint effort will be required at some point.

>> Cryptocurrency Bull Run: An Improving Economy Encourages Gains

Crypto Mom even mentioned the fact that she and Brian Quintenz are interested in combining their efforts in tackling this “confusing” market. Whether or not a joint effort is announced remains to be seen, but nothing can be certain. If there indeed is a partnership to come, then Bitcoin ETFs can have two options. Either be completely forgotten by the SEC or be more quickly adapted thanks to the CFTC’s ideals.

Featured image: DepositPhotos © hello.artmagination.com

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US CFTC Court Case Could Affect Its Authority on Crypto – Crypto Currency News

The U.S. Commodity Futures Trading Commission (CFTC) has entered into a court case that could determine if it has the authority to regulate cryptocurrencies.

Reuters reported on Wednesday that the CFTC had sued Randall Crater’s tech company and the cryptocurrency My Big Coin in January.

Allegedly, Crater and his company “perpetrated a $6 million [USD] fraud on people who wanted to buy My Big Coin.”

CFTC Court Case

According to the article, Crater’s lawyers have said the CFTC does not have any authority on the cryptocurrency because it is not a commodity where future contracts are traded, which is what the commission focuses on regulating.

Gregory Kaufman, a lawyer at the Eversheds Sutherland law firm, has said that the final decision of the case “would have a chilling effect on the CFTC’s application of its powers in this area,” if the ruling was against the CFTC.

The decision could affect its ability to police cryptocurrency frauds, as the only cryptocurrency where future contracts are traded in the US is Bitcoin (BTC), according to Reuters.

Katherine Cooper, a lawyer for Crater, had this to say on the court case;

“Our argument boils down to the fact that because My Big Coin does not have future contracts or other derivatives trading on it, it is not a commodity.”

>>Ethereum(ETH), Bitcoin Cash, Litecoin(LTC) and Stellar(XLM) Added to Regulated Crypto Exchange itBit

Reuters raises the question over cryptocurrency frauds and what regulators could have jurisdiction over them.

Neal Kumar, a lawyer at the law firm Willkie Farr & Gallagher, has suggested that Crater may still lose the case, as the Commodity Exchange Act defines services as commodities when they could have future contracts in the future, not only if they have them right now.

Arguments of the case are set to be heard in Boston by US District Judge Rya Zobel on Thursday.

A total of eight cases relating to cryptocurrency have been announced by the CFTC,  so far.

The ability for commissions similar to the CFTC to regulate and police cryptocurrency still looks like it’s in murky waters. What do you think the ruling from this court case could be?

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