Crypto Industry Should Self Regulate, Says CFTC Commissioner

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Coindesk | Annaliese Milano | March 8, 2018

Regulations can take years to develop, so why wait when you can self-regulate?

That's the message U.S. Commodity Futures Trading Commission (CFTC) commissioner Brian Quintenz delivered to the audience at the D.C. Blockchain Summit on Wednesday.

"I believe that a private cryptocurrency oversight body could bridge the gap between the status quo and future government regulatory action," he told the audience in his keynote address.

Quintenz also suggested that a cryptocurrency self-regulatory organization (SRO) could have an impact beyond the U.S. market, and could potentially take on global significance.

"I think right now everyone's trying to figure out where and how their laws apply to this space," he told CoinDesk in an interview.

Quintenz continued:

"So if the community takes advantage of that time and that ambiguity there's the potential for a global framework to apply to everyone if there's enough buy-in from the community to do that, since there aren't jurisdictional questions as to which entity has to do what, or rules that necessitate a bifurcation or separate approaches to the regulation."

Classification confusion

Numerous jurisdictional questions concerning cryptocurrencies and tokens currently face the industry, with the CFTC, the Securities and Exchange Commission and the Internal Revenue Service taking different stances on how they classify the assets.

While Quintenz remarked in the interview that "bitcoin is absolutely, clearly not a security. It is absolutely a commodity," he also said that the aforementioned agencies and others should avoid reducing the broader space to one type of product.

"In reality, it's a very broad array of innovative products that have been created," he explained, going on to say:

"Some are very simple, some are very complex, some have utility function, some have security-like features, some have payments associated with them or returns or ownership, or I'm sure some could have voting rights. You get into a very murky landscape very quickly as you go through the diversity of the landscape here."

While the commissioner said it is unlikely that the CFTC would be directly involved in creating a cryptocurrency SRO, he said it could likely offer some guidance informed by policies it has already developed for exchanges and clearinghouses with regard to cybersecurity:

"We can tell them about what we've already done and help them navigate the decisions we've already made to help inform any new concepts that could better apply to the space so they don't have to recreate the wheel," he said.

Agency coordination

As for the CFTC's role in regulating cryptocurrencies, Quintenz emphasized that he would like the agency to avoid setting policy through enforcement actions, though it has done so in the past. He explained that policy set in that manner would lack "the same force as a commission ruling or as a judge's adjudication on a case."

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The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding, alternative finance, fintech, P2P, ICO, and online investing stakeholders across the country. NCFA Canada provides education, research, industry stewardship, and networking opportunities to over 1600+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada.  For more information, please visit:  ncfacanada.org

 

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