During an interview, US Congressman Darren Soto stated that the Securities and Exchange Commission (SEC) shouldn’t regulate most cryptocurrencies. According to Soto, cryptocurrencies should instead be overseen by the CFTC (Commodities and Futures Trading Commission) and the FTC (Federal Trade Commission). He said they should not be classified as securities and be regulated by the SEC.
No Singular Regulatory Body for Cryptos
At this time, there is no single regulatory body overseeing the cryptocurrency industry in the US. Due to this, the question of whether cryptocurrencies are commodities or securities has remained unanswered.
According to the CFTC, there are some major cryptocurrencies that qualify as commodities. Bitcoin is the most notable example.
However, other government regulators feel that most tokens that have been sold through an ICO (Initial Coin Offering) should be classified as securities, which means they should come under the purview of the SEC.
To muddy the waters even further, the IRS (Internal Revenue Service) has stated for Federal tax purposes, it will treat cryptos as property.
Promoting a Crypto-Friendly Regulatory Environment
Soto, as a member of the US House of Representatives for the Ninth District of Florida and a Democrat, is spearheading a bipartisan effort with Republican Congressman Ted Budd to promote a crypto-friendly regulatory environment in the US.
He has been advocating that the government agencies’ jurisdictions for cryptos should be clearly defined, and that cryptocurrencies should also be classified appropriately. Soto stated that applying the Federal securities laws across all cryptocurrencies could hurt the burgeoning market.
Soto also said that the SEC should oversee only those cryptos that are true securities, those that are predominantly commodities and currency transactions. The Congressman said that there is a growing consensus within the industry that the CFTC and the FTC are more appropriate for the majority of the cryptos and the types of assets they are.
The House representative has been making his case for doing away with heavy-handed regulations against cryptos so that the US could remain competitive in the global environment. He cited examples of Malta and Barbados, whose governments are proactively working towards supporting a crypto industry.
Soto said that American have taken for granted that the US dollar is the foundation of the global economy at this time. However, as the adoption of cryptocurrencies grows, they could lose the advantage the dollar currently has. Therefore, he feels it is necessary to create an environment in the US where the crypto industry can flourish.