US, Foreign Regulators Teaming Up To Combat Cryptocurrency Fraud – CFTC’s Giancarlo

Mergers, Regulation | March 8, 2018 By:

Commodity Futures Trading Commission (CFTC) chairman J. Christopher Giancarlo has revealed that US regulators are working with their counterparts abroad to fight cryptocurrency fraud.

Speaking during a US House of Representatives committee hearing on CFTC’s forthcoming budget, Giancarlo said he had talks about cryptocurrency recently with the International Organization of Securities Commissions (IOSCO), as well as regulators in Europe.

In January, US Treasury Secretary Steven Mnuchin said that a working group focused on cryptocurrencies has been created by the Financial Stability Oversight Council (FSOC), a government body that assesses risks to the US financial system. The working group includes the CFTC, the Securities and Exchange Commission (SEC), and bank regulators.

Giancarlo, however, said that the working group has not yet been able to come up with a coordinated plan to address the “who-should-regulate-what-and-how” issues.

The SEC’s jurisdiction comes into play when cryptocurrency products are deemed to be securities, while the CFTC is currently able to regulate cryptocurrency futures, but not the actual buying and selling of bitcoin and other cryptocurrencies.

Giancarlo said that his agency has been aggressive in trying to root out crypto fraud, but press coverage of cryptocurrencies far outweighs their impact on the financial markets.

During the hearing, Connecticut Democratic Representative Rosa DeLauro accused Giancarlo of weakening the policing of larger markets by devoting too much effort on cryptocurrency enforcement. The CFTC chairman responded that would-be investors, particularly young ones, face risks that warrant attention.