During an event called ‘The Year ahead for Capital Markets,’ the two regulatory bodies of the United States, SEC and CFTC, came together at the Bipartisan Policy Center to voice their positions on Bitcoin futures contracts and Bitcoin exchange-traded funds [ETFs].
SEC has a history of rejecting many ETF submissions on numerous occasions and even delaying many proposals until they were withdrawn. This year too, filings have not gained any momentum in the approval process.
The commissioner of the US Securities and Exchange Commission [SEC], Hester Peirce, admitted at the event that the SEC is yet to understand how the entire space works. The regulatory body has been reluctant to approve Bitcoin ETF filings and has not been able to provide a strong ground to back up the action. Peirce said:
“At the SEC we’ve been unwilling to sign off on a Bitcoin ETF, an exchange-traded product based on Bitcoin. My concern about our approach in that area is it looks a little bit like a merit-based approach judging the underlying bitcoin markets.”
Talking about the unregulated nature of the cryptosphere, Peirce stated:
“There are lots of markets that aren’t regulated but we nevertheless build products on top of them.”
She further asserted that there is a need to rigorously assess susceptibilities and apply reasoning in the sector.
Addressing the tumultuous phase of Initial Coin Offerings [ICOs] at the Bipartisan Policy Center, Peirce stated that it is normal at the beginning of any trend. She further pointed out the need to do a thorough background research of the people behind the ICOs, as well as a deeper understanding of their whitepapers.
Hester Peirce had previously earned the tag of ‘crypto mom’ for being critical of the Bitcoin [BTC] community.
Commodity Futures Trading Commission’s Brian Quintez too voiced his opinions on the subject. Discussing crypto regulations at the event, he suggested that jurisdiction was required to mitigate the chances of the contracts being vulnerable to any fraudulence.
The commissioner further claimed that the CFTC has fraud and enforcement jurisdiction only in the commodity space. Hence, he advised entities to form a unified self-regulatory structure with certain standards for the purpose of discussion, implementation, and examination of ICOs.
Additionally, Brian also talked about a process of self-verification of contracts in the Commodity Exchange Act wherein regulatory agencies can approve or disapprove a contract within a stipulated time period called the review period.
In the case of the former, the contract can be self-certified by the exchange seamlessly. The CFTC commissioner further confirmed that even if the contracts are not granted a green light, the CBOE and the CME can still pursue the self-certification course.
Hester Peirce also spoke about the possibility of a collaboration between the two agencies. She argued that the current state of the digital market space was perplexing and said:
“There [are] questions about where your jurisdiction ends and ours begins and again we don’t want to have overlap there so you know my main concern has been that I think we need to do a better job providing guidance.”
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