-
According to Deaton, DOGE could drive the union of these institutions in the United States.
-
In the past, the CFTC argued that Ethereum was a security, encroaching on SEC grounds.
On December 13, 2024, John E. Deaton, former candidate for United States Senator, explained through his X account why the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission) should merge into a single entity.
Deaton’s publication confirmed the statements of Perianne Boring, founder of the company The Digital Chamber, who argued that the entity called DOGE (Department of Government Efficiency), led by Elon Musk and Vivek Ramaswamy, could promote this union .
DOGE is not yet operational and would begin its work around the time of Donald Trump’s inauguration as the new US president.
What is Deaton’s proposal based on?
Both the SEC and the CFTC are independent agencies of the United States federal government. Its main function is regulation and supervision of specific financial markets.
While the SEC works on the markets for products classified as securities (Bitcoin-sec/” target=”_blank” rel=”noreferrer noopener”>securities), including stocks, bonds, mutual funds; The CFTC regulates derivatives markets, such as futures, options and swaps, which are related to commodities and other financial products not traditionally considered securities.
In that sense, the initiative of the former senatorial candidate maintains that currently the functions of these two agencies overlap in areas such as the supervision of financial assets that mix characteristics of securities and commodities.
The merger of these institutions and regulated unification, according to Deaton, would eliminate this duplication of tasks.would optimize resources and time and would offer clarity to investors and regulators.
According to Daeton’s statements, the possible merger of the SEC and the CFTC could be beneficial for Bitcoin (BTC), simplifying regulation and eliminating current redundancies.
Secondly, Deaton explained that disagreements between both agencies have led to inefficiencies and lack of clarity for market participants.
For example, in March 2024, CriptoNoticias reported when the CFTC, challenging the SEC, rated Ethereum (ETH) already Altcoin-fork-bitcoin-halving-scrypt/” target=”_blank” rel=”noreferrer noopener”>Litecoin (LTC) as a commodity in a complaint against the KuCoin exchange.
This “turf war,” as Deaton called it, is especially problematic in digital assets, where both the SEC and the CFTC have attempted to regulate them under different legal frameworks.
In relation to this, Deaton explained that the discrepancies between both agencies foster a unfavorable environment for the actions of investors.
“A merged agency could provide uniform rules and protections for investors and market participants, avoiding confusion caused by different approaches to law enforcement, rules and market supervision.”
John E. Deaton, former candidate for United States Senator.
Ultimately, Deaton referred to the evolution of financial markets and that because of this many products would not fit into existing categories (such as derivative contracts and cryptoassets).
“Financial markets are increasingly complex, and many financial products, such as derivatives and cryptoassets, do not fit neatly into a single category. A unified agency would simplify rules and processes for companies and investors, reducing compliance costs.”
John E. Deaton, former candidate for United States Senator.
Additionally, Deaton highlighted the DOGE entity could improve the payment system in the United States.
Currently, according to the former senatorial candidate’s publication, 14 federal agencies and institutions supervise different aspects of payment systems in the United States. Among them, the United States Treasury, the Federal Reserve and its FedNow payment system, also intended by the SEC.
This fragmentation would create overlapping functions, additional costs and confusion for companies, which must comply with multiple and often contradictory regulations.
The case of XRP vs the SEC, the example highlighted by Deaton
To reflect the challenges of fragmented regulation regarding cryptocurrencies in the US, Deaton recalled the XRP case against the SEC, which dates back to late 2020 and has not yet reached its final point.
In 2015, FinCEN (Financial Crimes Enforcement Network), a US Treasury agency, classified XRP like a virtual currency and subjected it to banking regulations. However, five years later, the SEC declared it a security, contradicting the previous classification.
This SEC intervention caused losses exceeding $15 billion for investors, according to Deaton.
After different legal disputes and having withdrawn its lawsuits against Ripple executives, Brad Garlinghouse and Chris Larsen in October 2023, the SEC appealed a previous ruling at the beginning of October 2024, continuing its attack against the company Ripple Labs.
These “gray” zones into which cryptoassets fall can generate legal uncertainty and hinder innovation, as well as dissuading companies and investors from operating in the market.
In short, the communion of the SEC and CFTC could represent a catalyst that further drives the adoption of Bitcoin and other crypto assets.
However, this process is not yet in a debate phase in the United States, and nothing is officially established.
Crypto Keynote USA
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.
