CEOs of Crypto Exchanges to Congress

CEOs of crypto exchanges to Congress to head off SEC crackdown. Following a prepared testimony that was published on Tuesday. Executives from some of the nation’s largest and most powerful cryptocurrency companies. Plan to petition Congress to create a new regulatory framework. For digital assets that could help them avoid a costly showdown. With the Securities and Exchange Commission.

Executives from Coinbase Global Inc. COIN, +8.81 percent and FTX Group. The world’s second- and third-largest cryptocurrency exchanges. By daily market volume, respectively, according to CoinMarketCap. Plan to propose legislation to Congress that would consolidate primary regulatory authority. Over the crypto industry under a single federal agency. In order to end what they see as a costly battle of jurisdiction. Between entities such as the Securities and Exchange Commission. And the Commodity Futures Trading Commission.

Sam Bankman-Fried, CEO of FTX, prepared remarks for a hearing on crypto markets. Before the House Financial Services Committee on Wednesday. “A successful policy framework would allow crypto platforms. To offer both spot and derivatives trading on crypto assets under one unified system. With one rule book and one technology platform to manage risks. Related to all trading activity in customer accounts,” Bankman-Fried said.

According to current regulations, the SEC is in charge of overseeing spot markets for securities. While the CFTC is in charge of overseeing derivatives markets based on commodities. A joint jurisdiction between the two agencies covers derivatives markets. That are based on securities and other products, such as exchange-traded funds (ETFs). Whose value is tied to the price of a derivative. As in the case of several recently created bitcoin futures ETFs BITO, +3.48 percent.

Neither regulator conducts frequent surveillance of the spot markets for commodities. In which include bitcoin BTCUSD, -3.04 percent, and ether ETHUSD, 0.09 percent, among others.

Securities exchanges must also register with the SEC

Exchanges that provide securities to the general public must also register. With the Securities and Exchange Commission (SEC) as securities exchanges. Which no major cryptocurrency exchange has done as of yet.

A regulatory proposal from Coinbase, which was released in October. Urged Congress to establish or select a “digitally native and dynamic regulator”. To serve as the primary controller of the markets for virtual currencies.

Bankman-Fried will mention his company’s proposal for a system of “joint supervision. By the CFTC and the SEC, with one of the two market regulators functioning. As the primary regulator CEOs of crypto exchanges and the other as as the secondary regulator.” In his prepared testimony.

A system like this would almost certainly be beneficial to the Commodity Futures Trading Commission (CFTC). Which the crypto industry has typically regarded as a more sympathetic regulator. Than the Securities and Exchange Commission. The Commodity Futures Trading Commission (CFTC) currently regulates FTX. In its capacity as a cryptocurrency futures market and clearinghouse. And the CFTC has moved more quickly to approve crypto financial products. Such as bitcoin futures, which debuted in 2017.

“FTX is well-versed in the CFTC’s regulatory framework…

and believes that the CFTC’s principles-based approach. Makes a great deal of sense,” Bankman-Frieds intends to say in his speech.

Alesia Hass, the CFO of Coinbase Global, will testify before the Senate Banking Committee on Tuesday. Arguing that present “securities exchange legislation. Does not work for digital asset trading platforms.”

Our federal securities regulations, which have been in effect since the 1930s. Contain an extensive list of more than 20 financial products. That are considered securities, according to the text of her testimony. There is no suitable fit for most digital assets. In any of these categories since they contain characteristics.

The SEC believes it has broad jurisdiction

According to SEC Chairman Gary Gensler, the agency could soon take action. Against platforms that do not register as securities exchanges.

Gensler recently encouraged his predecessor Jay Clayton to register crypto exchanges. With the government and CEOs of crypto exchanges to safeguard investor protection.

“Platforms, whether trading, lending, centralized or decentralized. Are an essential location for public policy and investor protection.” Gensler stated last week at the Digital Asset Compliance & Market Integrity Summit.

He warned that if the SEC and trading platforms cannot also agree. “We will employ the enforcement tool,” suing non-registered entities. “But I think it’s better for these sites to work to get legally registered.”

The meeting will also cover regulation of stablecoins and banks that hold crypto assets for consumers. As well as Jeremy Allaire (CEO of Circle), Brian Brooks (ex-acting comptroller of the currency. And CEO of Bitfury) and Danelle Dixon (CEO of Steller Development Foundation XLMUSD. 1.14 percent) will be testifying.

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