The former chairmen of two leading US financial regulators believe their old agencies should work hand-in-hand to regulate crypto.
Jay Clayton, the former chairman of the Securities and Exchange Commission (SEC), and Timothy Massad, the former chairman of the Commodity Futures Trading Commission (CFTC), co-wrote an op-ed on domestic crypto policy in the Wall Street Journal this week.
Clayton and Massad say their former agencies’ recent enforcement actions against top crypto companies are unlikely to improve investor protection in the industry anytime soon.
“For these reasons, we continue to believe that other actions must be taken in addition to litigation to reach an appropriate conclusion.
In particular, the SEC and CFTC should jointly develop core investor standards and market protection for trading venues as they exist today. The agencies can act directly or through a self-regulatory organization, shifting funding responsibility to industry. It would be even better if Congress authorized this approach.”
The former top regulators note that more than 90% of spot trading volume takes place on centralized platforms, and they claim their strategy would increase investor protection in that space.
“Simply eliminating wash trading – where someone trades with themselves or an affiliate to drive up the price or trading volume of an asset, which is estimated to account for a significant portion of trading volume, particularly offshore – would be a huge improvement. ”
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