Brian Quintenz, a commissioner with the U.S. Commodity Futures Trading Commission (CFTC), has argued that the Securities and Exchange Commission (SEC) does not have authority over pure commodities such as crypto. His remarks follow SEC chair Gary Gensler’s recent assertion that most crypto assets are securities and should be covered by the SEC jurisdiction.
On August 4, Quintenz took to Twitter to clarify that pure commodities such as wheat, gold, oil, and even crypto do not fall under the SEC jurisdiction.
He shared his opinion shortly after former CFTC chair Christopher Giancarlo made similar comments on Twitter. In his tweet, Giancarlo said CFTC was the only agency that had the experience regulating markets for Bitcoin and cryptocurrencies.
The U.S. House Committee on Agriculture also showed support for Quintenz’s stance by retweeting his post. The committee’s tweet stated that crypto is “bigger than the SEC” and that congressional authorities need to “write the rules of the road to protect investors and innovation in the digital economy.”
The statements made by Quintenz and Giancarlo highlight the difficulties in developing a framework that adequately covers the emergent asset class and all its related aspects. They also outline a developing conflict between two federal agencies that are seeking to add their input to any potential ruleset.
Earlier this week, SEC chair Gary Gensler classified digital assets as securities, while stressing that crypto trading platforms lacked measures for investor protection. Gensler also agreed with his predecessor Jay Clayton, who suggested that all initial coin offerings must be viewed as securities.
According to The National Law Review Website, CFTC stated in 2014 that virtual currencies like Bitcoin are covered by the definition of “commodity.” A year later, the agency brought its first enforcement action against a Bitcoin trading platform, declaring that “Bitcoin and other virtual currencies are encompassed in the definition and properly defined as commodities.”
In addition to this, Judge Jack B. Weinstein of the U.S. District Court for the Eastern District of New York ruled in 2018 that virtual currencies are commodities and thereby subject to the jurisdiction of CFTC under the CEA. During the same year, a Massachusetts district court confirmed that the agency had the right to regulate digital assets, even when there were no future contracts tied to them.