Two members of the United States House of Representatives have petitioned the heads of the United States Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to work with participants in the crypto space for transparency and regulatory clarity.
In a Monday tweet, Representative Glenn Thompson said he had submitted a letter with Representative Patrick McHenry to the CFTC and SEC, urging the agencies to “establish a joint working group on digital assets.” Thompson and McHenry requested SEC Chair Gary Gensler and acting CFTC Chair Rostin Behnam to “promote an active dialogue” between federal regulators and participants in the crypto market.
“A working group on digital assets would enable both the SEC and CFTC to explore how to effectively use their current jurisdiction cooperatively,” said the letter. “Such a working group can foster transparent engagement with innovators in the digital asset ecosystem. As Congress contemplates additional legislation to address regulatory gaps, this work could provide us with additional information and clarity as we make these important policy decisions.”
The representatives added:
“Lawmakers and regulators must work together to properly balance protecting innovation with any new regulations to ensure the digital asset marketplace flourishes in the United States.”
The letter seems to be applying political pressure for the two government agencies to act on their own to form a joint working group rather than waiting for the force of law. In April of this year, the House passed a bill introduced by McHenry aimed at clarifying the regulatory role of agencies like the SEC and the CFTC on crypto.
H.R. 1602, the Eliminate Barriers to Innovation Act, gives Congress 90 days to establish the aforementioned working group with participation from the SEC, CFTC and the crypto industry. However, the bill has been referred to the Committee on Banking, Housing, and Urban Affairs in the Senate.
“Nothing prevents the SEC and CFTC from undertaking similar activities under existing law,” said Thompson and McHenry.
Many experts in crypto and blockchain have argued that the lack of regulatory clarity in the United States has the potential to harm the industry. Currently, the SEC, CFTC and Financial Crimes Enforcement Network handle digital asset regulation in the country, but with different jurisdictional claims, resulting in a patchwork approach companies must navigate to legally operate.
The SEC often determines whether tokens are securities using the Howey Test, with Chairperson Gary Gensler arguing the crypto industry, including decentralized exchanges, falls within the regulatory purview of the federal agency. However, CFTC commissioner Dawn Stump told that the government body “does not regulate crypto assets even if they are commodities.”