Brian Quintenz, the head of policy at a16z crypto and a former CFTC commissioner, said Friday that new legislation was needed in Congress amid ongoing regulatory uncertainty in the U.S. and what's been perceived by some as a widespread crackdown on the crypto sector by the Securities and Exchange Commission.
"We've seen the chair of the SEC take the view that all crypto except for Bitcoin, are in his jurisdiction and need to follow their rules," Quintenz said, speaking on a panel at CoinDesk's Consensus conference in Austin, Texas about whether or not a turf war was ongoing between the SEC, which regulates securities, and the Commodity Futures Trading Commission, which regulates commodities futures. Quintenz served at the CFTC between 2017 and 2021.
"A war involves two sides, and right now, I think there's one side that's on the field that's running down to the other end and spiking the football, because the CFTC does not have a seat at that table," he said.
SEC Chair Gary Gensler earlier this week doubled down on his message that crypto markets suffer from a lack regulatory compliance, not regulatory clarity, in a video he posted on Twitter that referenced pet goldfish and dogs.
Quintenz didn't appear to be too impressed with the argument.
"In order for the CFTC, or any other regulator, to have a legitimate view of their jurisdiction, that could challenge the SEC's perspective on what is and is not a security, and maybe for some more clarity, other than the videos that we are seeing posted on the SEC Chairman's Twitter feed which talk about goldfish and dogs, you need to have a new law that's passed by Congress that addresses what these products actually are and has a regulatory regime that is fit for purpose that doesn't kill their technology like the securities laws do," he said.
Quintenz said the Howey Test, which the SEC uses to determine whether or not an investment is a security and under its jurisdiction, should be applied on a "fact and circumstances" basis, and not broadly on an entire industry. He also alleged that the SEC had been going after "very weak defendants" that don't always have the resources to defend themselves.
"You're going to have settlements that agree with that perspective from the agency that isn't necessarily addressing the facts and circumstances of those underlying products," he said.
Coinbase, the largest U.S. crypto exchange, announced earlier this week that it is suing the SEC for clear rules specific to digital assets.
a16z sees need for new crypto legislation
Quintenz said that a legislative solution is needed and that he has seen some progress on the House Financial Services Committee and House Agriculture Committee.
"Without a willing regulator to accommodate the technology and write rules that fit the technology and protect consumers in the appropriate way, Congress has to step in," he said.
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