US CFTC Overtakes SEC As The Lead Cryptocurrency Regulator

• The Commodities and Futures Trading Commission (CFTC) now has the upper hand in cryptocurrency regulations in the US.
• US SEC calls for crypto exchanges to register as broker-dealers.
• Top Crypto exchanges like Coinbase are not on board with SEC’s decision.

While both SEC and Commodities and Futures Trading Commission (CFTC) are running contenders for US regulatory agencies for cryptocurrency, the CFTC is reportedly getting the bulk of the responsibilities as the lead regulator.

Earlier in July, the Senate Agriculture Committee advocated for a bipartisan bill enabling US CFTC in a lead position for Bitcoin and Ethereum’s spot trading.

Meanwhile, the US SEC is struggling to maintain its role and has been putting efforts toward smaller coins. US SEC believes smaller coins to be securities instead of commodities, and hence, has been trying to acquire control over it.

This means that even if US CFTC gets the upper hand as the lead cryptocurrency regulator, crypto exchanges are still liable to register with the US SEC as broker-dealers.

This call doesn’t sit right with top crypto exchanges like Coinbase, which has stated,

For those digital assets that are securities, registration under the current rules is, for many market participants, either not possible or not economically viable given the associated and unnecessary compliance burdens.

The Commodities and Futures Trading Commission Chairman, Rostin Behnam has shown interest to obtain the authority of regulating the digital commodity spot markets, over the last year.

However, the blockchain and crypto practice lead at the Washington DC Bradley law firm, Carol Van Cleef expressed to Forbes concerns about the agency being undermanned and that the CFTC “would be totally overwhelmed without a substantial allocation of new funding from Congress”.

To put it in perspective, the US SEC gets a $2.65 billion budget to fund over 5000 staff members while the US CFTC is allocated $1.5 billion to employ nearly 700 people. CFTC commissions mentioned in regards to the funds that if Congress grants the agency additional legislation, an increase in the budget can be simultaneously expected.