CFTC's Crypto Action Against KuCoin Could Incite Jurisdiction Tension with SEC
Summary:
US Commodity Futures Trading Commission member, Caroline Pham, voiced concerns about the commission's recent aggressive action against cryptocurrency exchange KuCoin, suggesting it might overstep its boundaries and infringe on the SEC's authority. This activity prompted discussions among US lawmakers and regulators about the proper role of such regulatory bodies and how cryptocurrencies should be classified. At the same time, it also spurred potential implications for Ether's classification as a commodity or security.
Caroline Pham, a member of the US Commodity Futures Trading Commission (CFTC), has raised questions about a recent aggressive crypto enforcement action that may put the commission at odds with the government's Securities and Exchange Commission (SEC). On March 29, Pham expressed concerns that the CFTC might be overstepping its jurisdiction by controlling certain securities in its enforcement case against the cryptocurrency exchange KuCoin. The commission accused the company of several violations of the Commodity Exchange Act and CFTC regulations on March 26, an accusation that coincided with the criminal charges from the US Department of Justice.
Pham warned that this action by the CFTC could potentially infringe upon the SEC's rights and challenge years of solid investor protection laws by wrongly equating a financial instrument with a financial activity, thus destabilising the securities markets' foundations. She further stated that holding shares is not equivalent to trading derivatives.
Pham's comments mirror the concerns raised by many US lawmakers and regulators about what the correct roles of the CFTC and SEC should be concerning cryptocurrencies and their classification as commodities or securities. Representatives from both regulatory bodies have been at odds about Ether recently. This comes following the revelation that Prometheum, a crypto firm, intended to offer custody services as a security. In the CFTC's complaint against KuCoin, Ether was categorised as a commodity. Legal professionals, however, have pointed out that the SEC's potential classification of ETH as a security could influence several pending decisions on spot Ether exchange-traded fund applications.
Also in the news is KuCoin's unexpected $10M airdrop along with the $37M raised by one tweet for a memecoin, as featured in Asia Express.
Published At
3/29/2024 10:38:22 PM
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