The company wants the Commodity Futures Trading Commission to supervise cryptocurrency spot markets fully so that the Securities and Exchange Commission would have less power over digital assets.
Through a two-page policy document the chief policy officer of Coinbase recommended the CFTC should get broader legal control over digital assets. Shirzad wants lawmakers to class Bitcoin and Ethereum as commodities to defend consumers and shield them from market scams.
Bitcoin and Ethereum exist as basic tradable properties rather than investment instruments. Federal law must enable the CFTC to supervise all crypto spot markets to shield customers from risks.
Coinbase Supports CFTC Market Control
According to Shirzad the proposal would restrict SEC authority over digital assets but the agency should keep its regulatory role especially when making rules for capital raising. He asked Congress to develop SEC regulations that let blockchain projects fundraise freely without receiving security status for each token.
Republican politicians and the digital currency sector have advocated for the CFTC to take charge of crypto oversight. Lawmakers Glen Thompson and Tom Emmer returned in 2022 to the Digital Commodity Exchange Act that would empower the CFTC to supervise digital asset markets.
Former CFTC Chair Chris Giancarlo strongly advocated for Commodity Futures Trading Commission leadership over crypto markets by presenting his case at Senate Agriculture Committee hearings. Previous reports from analyst showed former President Donald Trump wanted to place crypto market oversight role with the CFTC.
Under present rules the Securities and Exchange Commission oversees the basic crypto spot trading activity but states that Bitcoin and Ether are not securities. The law has yet to define its position regarding most cryptocurrency types. Gary Gensler as SEC Chair emphasized in 2023 that digital assets except Bitcoin were subject to SEC oversight since investors look to project teams to generate profits.
The SEC became more open to cryptocurrency after President Donald Trump won the election. During February the Crypto Taskforce from the SEC organized meetings with companies from the sector to explore rules for dealer-brokers and stakehold situation arrangement.
By pursuing CFTC oversight Coinbase follows industry efforts to move away from SEC oversight while different groups in Washington debate crypto regulations.
