August 23, 2021

Commissioner Dawn D. Stump commented today on, among other things, the distinctions between CFTC and SEC roles in the digital asset space, and the differences between “regulatory authority” and enforcement authority.”

Her comments are quoted in their entirety below, along with a link to “10 Concise Points” of note.

The CFTC’s regulatory oversight authority, as well as the application of our enforcement authority, must be well understood by the public. Only then can proper regulatory compliance be demanded. The recent growth in popularity of crypto products and other digital assets has drawn much attention to the question of how this new financial asset class is regulated in the United States. In response, there has often been a grossly inaccurate oversimplification offered which suggests these are either securities regulated by the Securities and Exchange Commission, or commodities regulated by the Commodity Futures Trading Commission. The prevalence of this misunderstanding about U.S. regulatory delineations has grown to a point that I believe requires correction.

Therefore, I have laid out 10 concise points to clarify how and what the CFTC regulates, as well as how Congress has distinguished our enforcement authority from our regulatory oversight. The CFTC does not regulate commodities (regardless of whether or not they are securities); rather, it regulates derivatives—and this is true for digital assets just as for any other asset class. Before considering whether to redesign the regulatory structure in the crypto context, let’s get the facts straight about our current system.

The full text of Mr. Waller’s speech can be found here.