CFTC Commissioner Calls for Crypto Regulatory Reform

• CFTC Commissioner calls for clear crypto rules to replace enforcement-driven confusion.
• She warns the lack of clear laws could lead to regulatory chaos from agencies like the FCC.
• CFTC could stabilize crypto markets with the right legislation and swift rulemaking.

During the North American Blockchain Summit on November 21, CFTC Commissioner Summer Mersinger called for clearer and more standardized regulations for the U.S. crypto industry. She stressed the need for regulatory reform, highlighting the CFTC’s “regulation by enforcement” approach in conjunction with the Securities and Exchange Commission (SEC).

SEC Leadership Shifts

Mersinger’s comments come as the SEC faces leadership changes with the resignation of Chair Gary Gensler. At the same time, incoming President Donald Trump has promised a revival of crypto-friendly policies. 

The CFTC and the SEC have reportedly taken an enforcement-driven approach to crypto regulation. This has led to confusion, especially with decentralized finance (DeFi) projects and decentralized autonomous organizations (DAOs).

Mersinger pointed out the case of Uniswap Labs, which faced charges despite trying to comply with existing laws. “We are setting policy through enforcement actions and court cases,” Mersinger said. “That’s not how policy should be made.” The platform ended up with a small fine after settling with the CFTC. 

However, Mersinger argued that the lack of clear rules leaves many companies unsure how to proceed. She stated that these settlements are particularly challenging. The public information shared through enforcement actions offers little guidance for companies trying to comply with the rules.

CFTC’s Role in Regulation

In another example, the CFTC took legal action against a DAO, seeking to classify it as either a corporation or an association. Mersinger expressed concern that decisions about treating entities should be made through formal policy, not court rulings. The CFTC Commissioner stated that she is uncomfortable with the idea of setting policy through enforcement actions and legal cases.

Mersinger also urged the introduction of new legislation to govern the crypto sphere. She argues that the CFTC, being smaller than the SEC, is the most suitable authority to regulate the crypto spot market. If the CFTC had the right laws on its side, it could easily introduce new rules and thus make the industry more stable. She also noted that agencies like the FCC could move in without clear legislation and only worsen the situation.

Mersinger called on the cryptocurrency industry to start engaging with the new administration once it is in place. “Don’t be scared to get out there and start knocking on the doors of policymakers and pushing for more supportive policies,” she said. With the U.S. crypto market still developing, Mersinger’s openness to more stringent rules may result in actual change.