The new chair of the Commodity Futures and Trading Commission (CFTC) has told Chedder Media that his agency is continuing to work closely with the SEC to establish definitions and jurisdiction when it comes to cryptocurrencies- though these have not yet been set.
Since he was sworn in in July, Heath Tarbert has carried on the crypto-friendly legacy established by his predecessor at the CFTC, J. Christopher Giancarlo.
Tarbert told the Cheddar journalists that the CFTC’s regulating is, “actually creating a market for digital assets. So we are allowing digital assets, the ones that fall within our jurisdiction…they have to be a commodity. So right now Bitcoin and Ether are the two that we think fall in our jurisdiction.”
Tarbert said the CFTC’s presiding over the two cryptocurrencies has improved conditions in crypto speculating by allowing traders to hedge:
“By allowing the to come into our jurisdiction, we’re allowing the futures market to develop based on these products. And in that way, when people are interested in buying…either bitcoin or ether, they can rely on…futures market(s), which have been around for a hundred years, which have price discovery, hedging and risk management. And so in many ways, it’s helping to legitimize and add liquidity to these markets.”
But Tarbert was unable to promise more clarity regarding other cryptocurrencies at this time.
“In the new year, will more cryptocurrencies -like a Ripple for instance- fall under your purview…?” one interviewer asked.
“It’s unclear. Stay tuned, I would say,” Tarbert answered.
Tarbert explained that the CFTC and SEC are still drawing lines, and suggested that current crypto trading strategies will have to continue relying on a certain amount of guess-work:
“Part of the issue is our jurisdiction we share with the SEC. If it’s a security, it falls under their jurisdiction. If its a commodity, it falls under ours. So we’ve been really working hard with the SEC for the past year to think about which falls in which box. Because I think if we hear anything from market participants, it’s that we really need clarity. That without clarity, it’s really difficult to figure out how these markets will eventually be regulated and how to trade them.”