CFTC Commissioner Christy Goldsmith Romero has asked the US Senate to tighten a portion of crypto regulation, according to a Jan. 18 report by the Wall Street Journal.
Commissioner warns against self-certification
The goldsmith Romero said today:
“I urge Congress to avoid allowing newly regulated crypto exchanges to self-certify products for listing.”
That advice refers to a bill, the Digital Commodity Consumer Protection Act (DCCPA), that would give self-certification powers to exchanges. This would allow exchanges to maintain substantial control over the specific crypto tokens they list for trading.
Goldsmith Romero claimed that self-certification could reduce the ability of the Commodity Futures Trading Commission to oversee cryptocurrency exchanges.
He also warned that self-certification could allow exchanges to avoid the reach of another regulator: the US Securities and Exchange Commission.
As such, Goldsmith Romero urged the US Senate to strengthen the requirements for exchanges contained in the bill before moving further.
The bill is designed to give the CFTC greater control
The Digital Commodities Consumer Protection Act has been under consideration since at least August 2022, when it was introduced in the US Senate.
The bill aims to give the CFTC control over standard crypto trading, regardless of particular details such as self-certification. The DCCPA text explicitly gives the CFTC “jurisdiction to oversee the digital spot commodity market.”
The DCCPA is controversial for several other reasons. Former FTX CEO Sam Bankman-Fried lobbied for the bill last year. Some speculated that FTX’s collapse in November would delay the bill by prompting lawmakers to revise it and strengthen its requirements for exchanges. Perhaps not coincidentally, Goldsmith Romero made his remarks today during a panel on the FTX collapse.
The bill is also controversial as it requires all digital asset services to register with the CFTC. This implicitly prevents decentralized exchanges and DeFi platforms from existing, and the bill has been widely labeled a “DeFi killer.”
Currently, the CFTC regulates the trading of derivatives. This has given the regulator enough space to get involved in high-profile crypto cases, such as actions against FTX and associated parties and Mango Markets attacker Avraham Eisenberg.
Although those cases involved some non-derivative issues, the CFTC could share responsibilities with other agencies to make the charges comprehensive.
This post CFTC commissioner asks Senate not to allow exchange self-certification
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