John E. Deaton Advocates for Merger of SEC and CFTC to Streamline Crypto Regulation
John E. Deaton, a prominent figure in the crypto industry, has once again voiced his concerns regarding the need for better regulation. He has been critical of SEC Chair Gary Gensler’s approach, which many believe is hindering the growth of cryptocurrencies. Deaton has proposed a potential solution to this issue: merging the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
During a discussion on Mornings with Maria, Perianne Boring highlighted the confusion and inefficiency caused by having two separate agencies oversee financial markets. Deaton echoed this sentiment, suggesting that combining the SEC and CFTC could eliminate overlapping responsibilities and conflicts, making it easier for companies to comply with regulations. This consolidation would provide a consistent approach to regulating both securities (such as stocks) and commodities (including Bitcoin and other cryptocurrencies).
As cryptocurrencies often straddle the line between securities and commodities, Deaton believes that a unified regulator would simplify the regulatory landscape for all stakeholders. It would also bring the U.S. in line with other countries that have a single financial regulator, enhancing the country’s competitiveness in global markets.
DOGE and the Call for Regulatory Consolidation
Elon Musk and Vivek Ramaswamy, prominent supporters of Dogecoin (DOGE), have emerged as potential advocates for merging the SEC and CFTC. This proposed merger could streamline regulations for emerging technologies like cryptocurrencies, offering much-needed clarity for investors and businesses navigating the complex regulatory environment.
Deaton also emphasized the urgency of consolidation in the payments sector, where over a dozen federal agencies, including the Federal Reserve, FinCEN, and the SEC, are involved in regulating payment systems. A unified regulatory framework could simplify these processes and reduce regulatory burdens.
Using XRP as a case in point, Deaton highlighted the regulatory discord surrounding the cryptocurrency. Despite being classified as a virtual currency by FinCEN in 2015, the SEC later deemed it a security, resulting in significant investor losses.
Driving Clarity in the Crypto Space
U.S. Congressman John Rose recently introduced a bill aimed at promoting collaboration between the SEC and CFTC through a Joint Advisory Committee on Digital Assets. As part of the “Bridging Regulation and Innovation for Digital Global and Electronic Digital Assets Act,” this committee would comprise industry experts, users, and academics tasked with guiding the agencies on harmonizing laws, assessing digital assets, and leveraging blockchain for efficiency and consumer protection.
The committee, which would convene twice annually and have two-year member terms, seeks to hold the SEC and CFTC accountable through public responses to its recommendations. This cooperative framework aims to replace “regulation-by-enforcement” with a more collaborative approach that fosters innovation in the U.S. market.
With his pro-crypto stance, Congressman Rose supports initiatives like the FIT21 Act and opposes excessive government control over digital assets, signaling a commitment to driving regulatory clarity and innovation in the crypto space.