Congress needs to decide whether cryptocurrencies are to be regulated as commodities or securities, according to Dawn Stump, a former commissioner of the Commodity Futures Trading Commission.
Stump, who is now an adviser for crypto risk-monitoring firm Solidus Labs, told CoinDesk TV's "First Mover" show on Tuesday that the industry needs “transparent” rules.
“The reality is that there is no clear distinction between commodities and securities in the crypto infrastructure and Congress may have to step in,” Stump said.
Stump’s comments come after the collapse of big crypto companies, including Celsius Network, Voyager Digital and Three Arrows Capital earlier this year. The problems of those firms could be an opportunity for government agencies to finally provide some consistent oversight, Stump said.
“This marketplace has reached a point at which these sorts of principles should be applied in a consistent manner,” she said. That, however, will depend on how regulators “define the registrations that these companies need.”
That is a gray area for the CFTC and the Securities and Exchange Commission, according to Stump, who said the goal of divvying up safeguards should be “more transparent and consistent" to give platforms “more confidence” about which agency they should register with.
“What’s happening is not necessarily a power grab, but almost a desperate call from the industry for clarity and what the regulatory expectations are,” Stump said.
Stump, however, added that the CFTC “still doesn’t have a clear mandate or authority” on regulating digital assets such as bitcoin (BTC). “That’s where Congress will have to make a decision," she said.