Senator John Hickenlooper of the United States wrote to the Chairman of the Securities and Exchange Commission (SEC) about regulating cryptocurrencies. Hickenlooper shares the majority of elected politicians' apparent belief in digital assets, which is a contentious issue in the nation.
What was in the letter?
The government representative reminded the regulator in letter (1) of his responsibility to "defend" investors, advance "responsible" innovation, and establish a clear framework. In that regard, he asserts that Americans are misusing cryptocurrencies and digital assets. The senators demanded equitable enforcement across all government departments and an "integrated regulatory framework." The SEC (2) and the Commodities Futures Trading Commission (CFTC) regulate investments and financial instruments in North America.
The SEC and CFTC have been at odds about who should oversee cryptocurrency, though. Although the CFTC (3) has contested its sister agency's decision, SEC Chair Gensler has publicly stated his aim to designate all digital assets aside from Bitcoin as crypto securities. Only the necessity for regulation and the creation of rules that can be implemented without impeding industry innovation seem to be areas where regulators in the U.S. agree.
Although the CFTC initially appeared more receptive to adopting this strategy, many legal proceedings against cryptocurrency ventures have questioned this. Both authorities are thought to be proposing to take legal action rather than reach an accommodation with projects in the emerging industry. In this regard, U.S. Senators noted that investors were perplexed by the absence of coordination.
Are Crypto Assets Securities or Commodities?
The American government official stressed that while some emerging asset classes can be governed by the SEC, other portions do not comply with current securities regulations. Investors in the U.S. have been using cryptocurrency products and asking for broader access to these assets, but the country's regulators have not given them any guidance.
Most crypto players and the government appear to agree on the latter, although authorities have not taken strong action in that regard. The SEC has decided to take legal action against well-known people and businesses for allegedly marketing or distributing crypto securities.