Cryptocurrency

Cryptocurrency industry turns to CFTC over SEC during regulatory controversy


18th October 2024 – (New York) The Commodity Futures Trading Commission (CFTC), often perceived as the diminutive watchdog of the U.S. overseeing major agricultural and financial futures contracts, finds itself in the spotlight as the preferred regulatory entity for the cryptocurrency industry, despite the Securities Exchange Commission (SEC) being deemed more effective and well-funded.

Critics point to the CFTC’s status as the smallest and most under-resourced government regulatory body, lacking the necessary tools and capacity for its current responsibilities, let alone the impending challenges posed by the burgeoning trillion-dollar global cryptocurrency market.

Described as a circus by critics, cryptocurrencies have attracted unsavoury associations with North Korean and Russian hackers, terrorist groups like Hezbollah, and drug cartels engaged in illicit activities. Renowned economist Paul Krugman dismisses cryptocurrencies as “a solution in search of a problem.”

According to Gil Duran, a former editorial page editor, cryptocurrencies are often likened to casinos or Ponzi schemes. The FBI’s alarming revelation of $5.6 billion stolen by crypto scammers from Americans in 2023 further tarnishes the industry’s reputation.

In a bid to enhance its image globally, the scandal-prone crypto sector is lobbying for the CFTC to take the lead in regulation, purportedly to present a more polished facade for widespread acceptance.

Reports from Public Citizen, a watchdog group, suggest that crypto firms are wielding financial influence in Washington, with significant contributions to political action committees (PACs) surpassing $200 million in 2024 alone, swaying both Republican and Democratic politicians towards aligning with the industry’s interests.

The U.S. House of Representatives recently passed the Financial Innovation and Technology for the 21st Century Act, shifting regulatory authority to the CFTC over cryptocurrencies, a move opposed by SEC Chairman Gary Gensler who warns of risks to investors and capital markets.





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