Speaking at the North American Blockchain Summit on Nov. 21, CFTC Commissioner Summer Mersinger discussed the need for standard US crypto-related policies through notice and comment regulation.
The United States Commodity Futures Trading Commission (CFTC) has played a role in implementing the current “regulation by enforcement” strategy alongside the Securities and Exchange Commission (SEC) under the outgoing administration, as evidenced by recent charges against Uniswap Labs.
Mersinger also said recent litigation against a decentralized autonomous organization (DAO) required the CFTC to seek a court verdict for entity classification. In this case, the CFTC wanted to classify the DAO as a corporation or association:
“I really started to get uncomfortable with this idea that we were kind of setting some sort of policy through our enforcement cases and through going to court. To me, how you’re going to treat an entity that’s a policy question.”
Need for regulated relief for the crypto industry
Mersinger said that while crypto entities, including decentralized finance (DeFi), are often charged under existing categories and expected to operate under the same laws, there is no provision for them to be officially registered. She added:
“This is really tricky settlements because the information we share publicly with our enforcement settlements really doesn’t offer a lot of guidance for anyone who’s trying to do the right thing.”
CFTC Commissioner Summer Mersinger at the North American Blockchain Summit 2024. Source: Cointelegraph
As a result, Uniswap tried to do the right thing but ended up attracting more charges, Mersinger said. Still, Uniswap settled with the CFTC for a “very small fine.”
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Despite its small size compared with the other agencies such as the SEC, Mersinger said that the CFTC is the “ideal regulator for the cryptocurrency spot market” as it can implement major legislative changes fairly quickly without disruptions to the market.
New laws can help crypto companies fight wrongful litigation
Moreover, she supported the introduction of new laws and regulations for crypto firms despite her predominantly conservative stance:
“What we’re seeing right now is that without those laws, you have agencies like the Federal Communications Commission (FCC) who can come in and create chaos and bring charges where maybe it doesn’t fit.”
Mersinger also recommended that the crypto industry start engaging with the new administration as soon as its leadership has been identified. “Don’t be afraid to start knocking on doors on day one because I think it’s critical to start” the conversations early on, she said.
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