Crypto Regulation News, CFTC vs SEC: Turf War Simmers
The crypto regulation race is heating up everywhere, today we looking at the cold war building up between two government agencies. We are talking about the Commodities Futures and Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
The matter at hand is regulations and who issues the new rules that govern crypto markets and connected FinTech as it relates to things such as automated crypto trading. Neither agency believes the other has exclusive right to dictate how market players conduct business, as such both agencies are actively applying their powers where fit to stake their claim.
The CFTC oversees commodities, futures, and derivatives trading. It’s claim to regulation rights falls under crypto trading in the futures and derivatives markets, also since the CFTC is tasked with preventing fraud, manipulation in markets and bad actors in the market space, the CFTC is convinced it should have the upper hand in setting the rules. On the other hand the case could be made, since cryptocurrency is not a commodity (for example sugar or oil), it does not directly fall under their jurisdiction.
The Securities and Exchange Commission is tasked to regulate securities, stuff like stocks and bonds but since they have stated the Bitcoin and Ether are not securities, its difficult to police these crypto tokens and others similar in nature such as Shiba or Doge. However stable coins and similar crypto assets fall under the definition of a security can be regulated by the SEC.
Crypto companies must be in compliance with the rules of the SEC or risk getting sued and possibly banned from listings or offering to the public.
Smaller new crypto projects or companies like Leven Project Network planning on running an ICO must stay under $5 million dollars raise in a 12 month period to be exempt from filing with the SEC, anything over would require requesting exemption or filing Reg Form D.
The SEC and the CFTC both have the mandate and responsibility to regulate the futures and derivatives markets. So this too makes it very difficult for any side to give ground.
SEC Leading For Now
The SEC has a history of regulations on the crypto/token/crowdfunding space dating back to 2008, and has since made updates to regulations as recent as 2021.
Everyone now looks to congress to help with sorting a whole lot of this issues out.
Thank you for reading.
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Leven Project Network (LPN) is a user-owned decentralized settlement network for real world payments. Owners of the new proposed blockchain network include, the Buyer, the Seller, the Developer. Our new network aims to simplify the payment process and create a vibrant alternative to the current card networks such as Visa or MasterCard networks.