In articles that ran in Bloomberg Law and Global Investor Group's FOW (Futures & Options World), Financial Markets and Funds attorneys Gary DeWaal and Daniel Davis called on Congress to "adopt meaningful and comprehensive crypto legislation."
For Bloomberg Law, Gary examined recent market turbulence and how it has renewed debate over federal regulation of crypto. He suggested that the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) should keep regulating crypto assets and activities under existing law, and the CFTC needs exclusive authority over the spot market in new legislation. It also is noted that the CFTC has the advantage, (1) citing recent enforcement actions; (2) it's an efficient change given the CFTC's existing plenary jurisdiction over derivatives trading involving virtual currencies; and (3) that as a principles-based regulator, the CFTC is best-situated to respond most rapidly to changes in technology and practices to ensure maximum customer protection. Read "This Is How the SEC and CFTC Should Regulate the Crypto Markets."
Gary and Dan reflected in FOW on the December 1 Senate hearing on the recent collapse of FTX and pending crypto bills, noting that Congress needs to quickly "adopt meaningful and comprehensive crypto legislation." With any one of three bi-partisan, comprehensive bills on the table, Congress could potentially grant the CFTC exclusive jurisdiction to regulate intermediaries and transactions involving spot virtual currencies; requires the segregation of customer assets at such entities; and imposes customer protection requirements on such firms equivalent to the types of obligations imposed routinely on intermediaries in the regulated derivatives and securities industries today. They cited other notable investment scandals in history, indicating that while it is not possible to prevent all instances of fraud, ensuring that one regulator — the CFTC — oversees spot crypto industry registrants would go a long way to ensure customer protection is at the forefront. Read "Congress needs to prioritise customer protections in crypto.
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