The U.S. Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) are collaborating to regulate digital assets. The goal of this is to strengthen oversight and fill regulatory gaps in the quickly expanding cryptocurrency business.
The two organizations want to resurrect the Joint Advisory Committee, which has been inactive since 2014, to facilitate collaboration in areas where regulations overlap.
In an X post on February 12, Fox Business Journalist Eleanor Terret noted the necessity for more transparent regulation in the Bitcoin business, which the collaboration of SEC and CFTC demonstrates.
While the CFTC regulates derivatives, the SEC regulates securities. While both agencies play separate roles, they collaborate to close gaps in cryptocurrency regulation. They capitalize on efforts like the Joint Advisory Committee.
Recent Progress in SEC-CFTC Collaboration
Caroline D. Pham, the acting chair of the CFTC, has been a strong advocate for this resurgence, noting the value of a concerted approach.
This project has the potential to streamline regulatory monitoring and identify jurisdictional limits. Ultimately, it might lead to a more stable regulatory framework for the crypto market.
The SEC and CFTC are considering collaborating to regulate cryptocurrencies to revive the Joint Advisory Committee, which was established in 2010. This group was created to address emerging regulatory challenges and improve coordination between the two agencies.
How Does This Affect the Crypto Market?
Unified regulation between the SEC and CFTC would provide certainty to the crypto marketplace. It could even possibly encourage more institutional investors to get in on the action, with better protection for investors.
However, this would also raise compliance expenses for exchanges and issuers. Clear rules would stabilize the marketplace but, if too restrictive, possibly smother innovation.
The SEC’s attempts to determine what assets constitute a security would help to end legal ambiguity, which has created many battles in courts of law. Clarity in regulation is of great importance to companies that need to navigate arcane legal frameworks in the United States.
The SEC and CFTC’s cooperation would bring much-needed transparency to cryptocurrency regulation, potentially stabilizing the market and spurring innovation.
The combined effort would streamline regulation and better protect investors, determining the future of the United States’ digital assets.
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