Coinbase Backs CFTC Over SEC as Crypto Watchdog

• Should it be the CFTC or SEC that oversees the crypto industry? Coinbase thinks it’s the former.
• The exchange is supporting two new bills in Congress that give the CFTC authority over the nascent industry, in line with other major crypto players.

The US crypto sector continues to grow, both in the trading and mining aspects. However, for the longest time, it’s not been clear who should regulate the industry between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Coinbase is siding with the former.

The SEC has continued to be the dominant regulator in the Bitcoin industry and has already brought charges against several dozen crypto firms, many of whom have had to shut down – rem Kik Interactive’s KIN token or Telegram’s botched TON project?

However, the CFTC’s profile as the Bitcoin regulator has been rising in recent times, culminating in two bills being tabled before Congress that seek to cement this position. The CFTC has also received the support of several crypto thought leaders and major companies who favor its approach to that of Gary Gensler’s SEC.

Coinbase has added its name to the list of pro-CFTC companies. Speaking at a recent event, the exchange’s head of policy Kara Calvert stated:

We’re very supportive of two efforts, one in the House, one in the Senate, that would provide spot authority to the CFTC. That’s by Senators Stabenow and Boozman, and Representatives Thompson and Khanna in the House.

Already, the commodity futures agency oversees any crypto company that’s deemed to provide derivative products like futures, a responsibility it partly shares with the SEC. However, with the new bills, it would oversee even the spot markets, regulating any crypto purchase or sale on exchanges such as Coinbase.

“Those bills are trying to get to the heart of, what is a non-security and how do we regulate that in a smart way that allows for innovation,” the Coinbase exec noted.

However, not everyone agrees with the CFTC getting crypto oversight authority, not least Gary Gensler. In a recent statement, he opined, “Given that most crypto tokens are securities, it follows that many crypto intermediaries are transacting in securities and have to register with the Securities and Exchange Commission (SEC) in some capacity.”

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