Might Crypto Regulation Really Shift from the SEC to CFTC?

American Regulation of Cryptocurrencies
America has been debating cryptocurrency regulation for a while, and it appears that the argument will soon come to a conclusion. In the interim, the Commodities and Futures Trading Commission (CFTC) may acquire regulatory authority over cryptocurrencies from the Securities and Exchange Commission (SEC).
Recently, the “Lummis-Gillibrand Responsible Financial Innovation Act,” a draft law from the Senate Legislative Council, surfaced. The draft, in its whole, suggested rules to encourage responsible financial innovation and include digital assets in the regulatory framework.

First, the measure mandates that in order for Decentralised Autonomous Organisations (DAOs) to function in the United States and receive tax benefits, they must register with the appropriate authorities. The same holds true for stablecoin providers and cryptocurrency exchanges.
Second, in an effort to impose tighter restrictions than those governing banks and other financial firms, the law would also grant investigative powers to many other agencies. The law might not be appropriate for short-term participants because its goal is to safeguard the interests of long-term investors.
By making securities regulation more clear, the third and most important change the measure would bring about is that the majority of cryptocurrency assets would fall under the purview of the CFTC. This would deprive the SEC, which has long been interested in cryptocurrencies, of its regulatory authority.

The CFTC Also Takes a Shot
In the same vein, although not having exclusive authority over items related to cryptocurrencies, the CFTC has also been actively interested. On June 2, the CFTC filed a case in U.S. District Court against cryptocurrency exchange and custodian Gemini Trust Company LLC. Although the specifics of the action stretch back to 2017, the complaint claims the corporation misled or failed to disclose material facts to the CFTC during the self-certification of a bitcoin futures product.
At the Reuters Commodities Trading USA conference, CFTC Commissioner Summer Mersinger stated that she thought the agency may soon take the lead in regulating cryptocurrencies and similar offers. “You’re seeing the industry come together around the CFTC becoming the primary regulator,” Mersinger stated. Although we still have a lot of power as regulators, our registrants enjoy great flexibility. Compared to other financial authorities’ top-down approach, they have shown a great deal of interest in that strategy.
However, it is important to remember that the Responsible Financial Innovation Act may not pass and may not have strong legislative support. If it happens, the industry could react negatively to the stringent rules; yet, if it doesn’t, cryptocurrencies might have a brighter future in America.