What is a cryptocurrency? Is it a digital currency that uses blockchain tech, or is it like a listed stock of some company, or is it a precious commodity like gold?
No two regulators around the world seem to have an identical definition of the term cryptocurrency. A few definitions can even be in contradiction to each other. The Australian Taxation Office (ATO) has not used the word ‘commodity’ while answering the question “what are crypto assets” on its website. By contrast, under the Income Tax Act of Canada, cryptos are considered a commodity.
The definition debate aside, a new debate can erupt over which is the apt regulatory authority to oversee the cryptoverse in any jurisdiction. A bipartisan proposal in the US, if it comes to fruition, can give more powers to the CFTC than to the SEC.
CFTC vs. SEC
The Commodity Futures Trading Commission, usually dubbed the CFTC, is the regulator that focuses on the regulatory oversight of the United States’ derivative market. This includes futures contracts, swaps, options, and other complicated financial products. The legislation ruling the CFTC was enacted in 1974. The Securities and Exchange Commission (SEC) has a different mandate.
The SEC is also an independent agency, which dates back to 1934 (following the market crash of 1929) and oversees the functioning of capital markets in the US. The SEC can be understood as the agency responsible for overall fairness and transparency in the US capital market with investor…
