Two U.S. financial regulators cannot seem to reach a consensus on how to treat certain cryptocurrencies as securities or commodities.
Caroline Pham, a commissioner with the United States Commodity Futures Trading Commission (CFTC), has suggested that a recent “aggressive” crypto enforcement action could put the regulator at odds with the Securities and Exchange Commission (SEC).
In a March 29 statement, Pham said the CFTC appeared to have exerted authority over certain securities in its enforcement case against cryptocurrency exchange KuCoin. The commission charged the firm “with multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations” on March 26, parallel to criminal charges from the U.S. Justice Department.
“The CFTC’s approach may infringe upon the SEC’s authority and undermine decades of robust investor protection laws by conflating a financial instrument with a financial activity, disrupting the foundations of securities markets,” said Pham. “Owning shares is not the same thing as trading derivatives.”
