Former CFTC chiefs critique US regulation at Bahamas crypto conference

Former Commodity Futures Trading Commission chair Chris Giancarlo says the current US regulatory framework is "not fit for purpose" when it comes to crypto.

At FTX and SALT's Bahamas conference, Giancarlo sat on a panel with former acting CFTC head and current legal policy and regulatory strategy of FTX, Mark Wetjen. The two discussed the current state of crypto regulation in the US.

When asked how they'd grade the US regulatory structure for crypto on a scale of 1 to 10, Giancarlo said he'd give the country a zero.

"I mean no disrespect to the regulators," he said. "These are regulations written 90 years ago, in the 1930s."

Wetjen, for his part, graded the US a "four to five," given the flexibility in those 90-year-old regulations. To close the gap, he said there are some barriers in current regulations, but more importantly, there needs to be a more active embrace of the crypto industry from people at the top. 

"What we really need to see I think is more entrepreneurialism and aggressiveness on the part of the staff of the staff at agencies, and I think they're trying as hard as they can, but it really takes some leadership at the top," he said.

The recent executive order from the Biden Administration is a good start, Wetjen continued.

Giancarlo also pushed for a privatized approach to the use of crypto in societies, like the growth of central bank digital currencies (CBDCs). He said he's concerned crypto will become marked by a central bank approach, in which central bankers set the terms of crypto use, including the issuance of CBDCs, rather than a free-market approach to crypto solutions.

Giancarlo also runs an initiative advocating for the creation of a digital dollar, called the Digital Dollar Project. 

Wetjen touted FTX's proposal before the CFTC, which posits a framework for crypto derivatives trading, as a means for the agency to make a forward leap in its treatment of crypto regulation. 

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Aislinn Keely joined The Block in the summer of 2019. She is a member of the outlet's policy team, holding down the legal beat. Before The Block, she lent her voice to the NPR affiliate WFUV, where she reported and anchored newscasts in addition to some podcast work. Aislinn is a proud Fordham Ram and editor-in-chief emerita of its newspaper. When she isn't writing or reporting, Aislinn is running and rock climbing.