A CFTC Commissioner Wants More Clarity On Crypto Compliance

Recently, Dawn Stump, the only republican in CFTC – Commodity Futures Trading Commission, has been vocal about his position on crypto regulation enforcement.

In an interview, Stump explained the reason for her opposition. She said it is fair to issue enforcement actions by making the tools for complaints available.

CFTC Missed the Mark

In her comment, she mentioned different cases where enforcement was carried out without the rules properly spelled out. She cited the example of Kraken, which was fined $1.25 million for operating futures brokerage without proper registration whereas there is no explanation as to how entities will register.

Also, she referred to the recent showdown with Tether. For her, there is no issue with the claim that Tether’s USDT is fully backed by the US Dollar, but the claim got Tether fined $41 million as it is tagged dubious.

In the case listed, Stump believed CFTC has missed the mark by enforcing crypto regulation without having the daily oversight of the cash markets under its jurisdiction. She said; “The CFTC is giving a false sense of security to the public without proper clarification as to what its boundaries are. The CFTC doesn’t regulate the digital commodity products, only the derivatives (futures).”

Need to Refocus

While she agrees the crypto sector does need regulation, the commissioner believes CFTC is not the perfect agency to carry that out. Getting involved in it will mean resources for cases that are originally under CFTC’s jurisdiction will be diverted to products outside its jurisdictions.

Stump said; “I just want to ensure that we are not reallocating resources meant for other things into matters we are supposed to be silent on.”

The Responsibility of the SEC

While Stump hinted at the fact that the Securities and Exchange Commission is better qualified than CFTC to regulate the crypto space, she posed a question to the SEC; “what makes them [SEC] conclude that crypto assets are securities?”

Many crypto enthusiasts and members of the crypto community had thought the newly appointed SEC Chair, Gary Gensler, will facilitate cryptocurrencies, he came out the other way round. While he mentioned that majority of all crypto that exist can be defined as securities, he did not give more guidance to such a conclusion.

Earlier this year, an SEC Commissioner who is also a republican has spoken against the agency. She believed the SEC is not doing enough to set up regulations that will be compliable for the crypto firms.