But according to a Senate staffer, this investigation is just the tip of the iceberg. According to the staffer from the office of Senator Cynthia Lummis (R-WY), every U.S. crypto exchange is currently under investigation, and there are more than 40 of them. This includes Binance, the world’s largest crypto exchange. Forbes reports that the SEC hasn’t responded to multiple requests for comment. While the SEC tries to crack down, the investigations raise questions about federal agency jurisdiction and just who has the authority to make rules for crypto exchanges.
The SEC Versus The CFTC
Before the first cryptocurrencies began appearing in 2014, the U.S. Commodities Futures Trading Commission asserted its jurisdiction over “virtual currencies.” In 2018, a federal court also ruled that the CFTC could pursue fraud cases involving virtual currencies. That year the chairman of the SEC also stated that he didn’t believe cryptocurrency was a security, implying that crypto should fall under the jurisdiction of the CFTC. But in June of 2022, the current SEC chairman, Gary Gensler, said that Bitcoin was the only cryptocurrency he was comfortable calling a commodity.
While the territorial dispute over cryptocurrencies won’t resolve overnight, they are heading toward more oversight. U.S. Senators Debbie Stabenow (D-MI), Chairwoman of the Senate Committee on Agriculture, Nutrition, and Forestry, and ranking Republican member John Boozman (AR), recently introduced the Digital Commodities Consumer Protection Act of 2022. The DCCPA would give the CFTC new powers to regulate digital commodities. Senator Lummis also co-sponsored the Responsible Financial Innovation Act with Senator Kirsten Gillibrand (D-NY), allowing even more comprehensive digital asset regulation.
A complex regulatory regime is going to be established to oversee this new area. The SEC, CFTC and other governmental agencies will all play a key role in developing these rules. In the meantime, how crypto currencies are created, traded, promoted and exchanged is going to remain a hot button issue.
SEC Whistleblowers Need Experienced Representation
If you’re considering becoming an SEC whistleblower, you need an experienced attorney to advise you and protect your rights. Crypto currencies and their applicability to the federal securities and commodities laws will remain a hot button issue for many years ahead. Experienced counsel is needed to help navigate the regulatory maze and determine whether someone has a viable claim. At Silver Law Group and the Law Firm of David R. Chase, our attorneys have the skill and experience you need to explore your options. Call us today at (800) 975-4345, or email us to set up a free consultation.