Commissioner Summer Mersinger, of the Commodity Futures Trading Commission (CFTC), is one of the few U.S. regulators who is routinely willing to defend the crypto industry and call out what she sees as overzealous oversight. She will be speaking at Consensus 2024 in Austin, Texas, on May 30.
CoinDesk caught up with Mersinger to discuss the Cain and Abel rivalry between the CFTC and U.S. Securities and Exchange Commission (SEC), how her agency decides which enforcement actions to pursue and her views on a variety of issues, including the CME possibly getting into the spot bitcoin market, the emerging world of betting markets and Washington D.C. traffic.
Is it an accurate view that the SEC and the CFTC are in somewhat of a turf war over crypto?
I think there are certainly questions around who has the appropriate authority. There are people between the two agencies who are willing to work together, in fact, at Consensus Commissioner Peirce and I will be speaking together. We have some similar views. But it is a struggle because, sometimes where debate has been leveled – whether it's an enforcement case or another action we have said falls under our fraud and manipulation enforcement authority – we're seeing the SEC start to ask questions as though it falls under their jurisdiction. And so there is certainly some tension there. It's largely the lack of clarity that's really causing the tension.
You're in a minority position as a regulator who's somewhat favorable to crypto. Could you just explain why it is that you're willing to stick your neck out?
Part of the reason I went into government, generally, is that – while there's a need for government in people's lives – we don't want to overstep. We also want to make sure the rules of the road are clear so that people can abide by the law. This is an area where there is a real problem. A lot of people are very interested in investing in, or trading, cryptocurrencies, and we have not provided any clarity – we've made it very murky. That's not what the government should be doing. It's creating a situation where you have people relying on the word of a regulator, and the rules of the game are being changed in the middle of the play.
I still think it's important that we speak up and let people know that, whether you like crypto or not, that's not the point here. The point is that regulators have really made this confusing and difficult.
Do you agree with Commissioner Pham's idea that the Government Accountability Office should investigate the CFTC's enforcement actions?
COMMISSIONER MERSINGER: It's difficult to ask another agency to come in and look at the internal workings of the CFTC. I understand where Commissioner Pham is coming from and I think it's that same kind of feeling that we shouldn't be regulating through enforcement. But I also think this is a leadership question. I greatly respect Chairman Behnam, but this is an issue with the political direction from this White House. So, instead of an audit, we need to ask: Is the problem the agency, or the current political leadership driving our agenda and broadly stifling financial innovation?
I don't want to put words in your mouth, but is this to suggest that the regulatory landscape would improve if Trump was re-elected in November?
There are clear differences between President Biden and former President Trump, so that does drive the regulatory agenda. So, if leadership changes, you would certainly assume there would be new policies and a new regulatory agenda.
I'm curious to what extent you're in active dialogue with Congressmembers about potential crypto legislation?
They use us as a resource. We talk to members of the House Financial Services Committee, the Agriculture Committee, and certainly members of the Senate and work with them on where there is ambiguity in the laws or opportunities to make some delineations and clear paths for regulation. It's offering our assistance and expertise and it's helpful to have those conversations because they also want to make sure we're able to implement the laws that they pass. They may have great intentions, but if it's impossible for the agency to implement then it's useless.
That makes a lot of sense. Do you think that there needs to be bespoke crypto legislation or would new interpretations of existing laws suffice?
There are some who believe we can use current statutory authority, whether the SEC or the CFTC, to regulate – which is where we see regulation through enforcement actions. I disagree. The only way to get past just bringing enforcement actions is to have something come out of Congress that says "here's how to handle cryptocurrencies."
Beyond legislation, the two agencies also need to sit down and come up with some joint rulemaking. We did that with Dodd Frank, and we certainly could do that here. That's an important piece of making sure people know which regulator is going to regulate them, which door to walk into. There's no question that without statutory changes to ensure it's very clear where the jurisdiction is, agencies will try to go in separate directions.
Read the full interview here.
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