Crypto Jurisdictional Lines Need Defining, CFTC’s Behnam Says

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By Andrew Ramonas

Officials across the federal government need to have a “broader conversation” about which regulators have jurisdiction over certain elements of cryptocurrency and other financial technology, Democratic CFTC Commissioner Rostin Behnam said April 11.

The Securities and Exchange Commission and Commodity Futures Trading Commission both have asserted jurisdiction in the crypto space, with the SEC focusing on initial coin offerings and the CFTC directing its attention to Bitcoin and similar virtual currencies. But questions remain about where the lines are drawn between the SEC, CFTC, Treasury Department, and other agencies in the emerging area.

“These assets are so novel, so new that perhaps we need to rethink what we’re covering, what the jurisdiction is, and what the statute says,” Behnam said at a cryptocurrency discussion hosted by the Institute for Financial Markets and George Mason University’s Mercatus Center in Washington.

The Financial Stability Oversight Council would be “one of the best vehicles” to start to have the conversation, Behnam said. The FSOC, a panel of financial regulators charged with monitoring the U.S. financial system, counts the Treasury Department, SEC, and CFTC among its members.

Congress may have a role, too, he said.

“I’m not suggesting there needs to be legislation,” Behnam said. “But given the dynamics of what’s going on and some of the vacuums that exist in the regulatory space, perhaps there is.”

To contact the reporter on this story: Andrew Ramonas in Washington at aramonas@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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