The stately Timothy Massad, the previous chairman of the Commodity Futures Trading Commission (CFTC), spoke with CNBC on Monday, airing his concerns about the loosening reins of authority over the crypto industry. According to Mr. Massad, simply enforcing extant regulations on crypto enterprises isn’t proving adequate anymore. To maintain equitable balance, the development of updated “standards” is a necessity. You can watch highlights from the interview with Mr. Massad on CNBC here.
It’s crucial to observe the increasing urgency in such a perspective. While litigation may gradually but efficiently enforce laws, crypto enterprises may tactically adopt a laggard approach, anticipating favorable changes in regulatory attitude following the 2024 elections. On top of that, even successful legal action may not be enough to round out and resolve all the issues cropping up in an industry that evolves day-to-day while operating in the legal shadows.
One of the contentious issues among many regards the classification of crypto. Should it, or should it not be considered as securities for regulatory purposes? While Mr. Massad acknowledged this as an important question, he urged for focus on other immediate issues. “Let’s not get hung up on that”, he said.
Presenting a constructive approach, the former CFTC chair suggested the conception of a self-regulatory organization for crypto businesses. This proposal wasn’t exclusive but rather a collaborative initiative in concert with both CFTC CFTC and the Securities and Exchange Commission (SEC) SEC. Such a progressive step could be instrumental in establishing basic industry standards in critical areas like fraud prevention, asset protection, conflict of interest, and obligatory reporting requirements for crypto exchanges and trading platforms.
Mr. Massad expressed that this form of organization might be a real-time solution to settling some elementary industry standards without the necessity of rewriting securities laws – a lengthy and convoluted process. To supersede this, a notable issue arises. The recreation of securities or derivatives laws could potentially unleash a slew of unforeseen consequences, or even loopholes that were unintended. Rather, this proposed strategy may serve as an efficient way to incorporate investor-protection standards into the crypto ecosystem as it stands today, without needless modifications to the established law structure.
Source: Cryptonews
