Gary Gensler: SEC to regulate the crypto market jointly with the CFTC

The U.S. Securities and Exchange Commission (SEC) plans to strike agreements with other federal agencies to tighten oversight of crypto exchanges and firms. The disclosure came from SEC chair Gary Gensler, in an interview with the Financial Times.

The official said he is in talks with colleagues at the Commodity Futures Trading Commission (CFTC) to sign an official agreement. The arrangement would close gaps in the fragmented regulatory framework and “provide appropriate safeguards and transparency” in the trading of digital assets.

Gensler explained that the regulator’s remit covers firms that offer tokens classified as securities. The agreement would entail the CFTC receiving information about the product if a digital asset that meets the commodity definition is listed on an SEC-controlled platform.

“I am talking about a single set of rules for exchanges that would cover all trading activity, regardless of the pair — whether it is security-token versus security-token, security-token versus commodity-token, or commodity-token versus commodity-token. This would protect investors from fraud, front-running, manipulation, and would also ensure the transparency of the order book,” he said.

The head of the SEC stressed that a single set of rules would benefit the crypto industry by boosting consumer confidence in digital asset markets.

In April, a group of U.S. House of Representatives members introduced for consideration a project that would establish direct oversight over certain types of crypto transactions and Bitcoin exchanges under the CFTC.

The document introduces the term “digital commodity.” It would transfer issues related to regulating issuers of such assets and their trading to the agency’s remit. The SEC, for its part, would continue to oversee tokens with security-like properties.

As reported in October 2021, the CFTC chair Rostin Behnam (then a candidate) proposed granting the agency the status of chief federal regulator of the crypto market.

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