Coinbase has set up Congress to Commodity Futures Trading Commission (CFTC) to power on spot cryptocurrency markets, a move that could significantly limit the role of the Securities and Exchange Commission (SEC) in regulating Digital Assets. I asked to move it. Coinbase Chief Insurance Officer Faryar Shirzad has submitted a proposal that outlines six priorities in the crypto industry. Most importantly, the transition to monitoring to CFTC. According to Shirzad, digital assets such as Bitcoin and Ethereum should be treated as goods rather than securities and must fall under CFTC jurisdiction. He argues the move provides better transparency and consumer protection while reducing the risk of fraud and market manipulation.
Currently, the SEC oversees the crypto market, but faces criticism from the Crypto community. This argues that the SEC approach is overly restrictive. The SEC’s attitude is that most cryptocurrencies except Bitcoin need to be regulated as securities. This is the view published in 2023 by former SEC Chairman Gary Gensler. Gensler investigated whether ether should be classified as security, but removed the investigation. The SEC claims that many crypto assets are within their scope, but the crypto industry believes CFTC is better at regulating these markets. The push for CFTC surveillance is consistent with the views of several Republican lawmakers, including Glen Thompson and Tom Emmer, who reintroduced the Digital Commodity Exchange Act in 2022. The bill aims to give the CFTC the power to regulate the sector. CFTC Chair Chris Giancarlo.
In addition to shifting authority to CFTC, Coinbase advocates SEC rules that allow blockchain developers to raise capital without automatically classifying tokens as securities. Shirzad believes that the SEC still plays an important role, particularly in setting clear guidelines for raising capital and ensuring fair access to opportunities for blockchain developers. He argues that venture capitalists have too much control over the crypto sector and are pushing the project towards disproportionately profitable outcomes. According to Shirzad, such systems undermines the value of crypto, which is supposed to ensure that everyone has equal access to opportunities.
The debate about regulatory oversight continues to evolve, and CFTC has gained more support within the industry. Cryptospace has long criticised the SEC for its severe approach, but CFTC is considered an industry-friendly option for regulating digital assets. Additionally, reports suggest that President Donald Trump is considering handing over the crypto sector oversight to the CFTC.