US crypto needs clearer rules before punishment, says Watchdog member

According to a member of the US Commodity Futures Trading Commission, the US finance supervisory authorities should create more clarity about how cryptocurrency groups are monitored before their alleged failures are punished.

DAWN Stump, a commissioner of the CFTC who has a certain supervision of cryptocurrencies together with other authorities, including the Securities and Exchange Commission, has become a vocal support for clarification of guidelines for digital assets, since the supervisory authorities have targeted some companies with fines or complaints.

"What I would like to advise against CFTC here is to take enforcement measures without giving reasons [their targets] the tools that you need to be compliant," she said in an interview with Financial Times and added that she was against "regulation through enforcement".

"I think a lot is happening," she added.

Stump, who was nominated by President Donald Trump in 2018, is the only Republican commissioner at CFTC, together with the incumbent chairwoman Rostin Behnam, a democrat. The supervisory authority for the US derivative markets usually has five commissioners, but three seats are vacant.

The statements of the Commissioner emphasize a tense debate that was triggered by the emergence of the crypto industry that has left a complex regulatory network like in the United States that tries to check the monitoring of a balloon sector.

She referred to the Kraken Kraken, which in September by the CFTC with a fine of 1.25 million

"We have never developed a regulation that explains to these companies how to reach this registration," said Stump. "I would have preferred it if we had only brought up this type of cases if we had better defined how they could achieve compliance."

Many Republican legislators agree with Stump that there is no sufficient clarity about crypto regulation. Pat Toomey, the highest republican in the Senate Banking Committee, said this week that "the failure" by Gary Gensler, the Seclei Chairman, "underlining clear traffic rules for cryptocurrencies, underlining the need for congress".

Gensler, who was nominated by Joe Biden, said that many crypto products could be defined as securities, but have not published any other guidelines because the existing rules are sufficiently clear. In the past few months he has urged crypto platforms to contact the Sec and discuss whether they should register with the agency.

"I wish the SEC would [Give] Further details on how to conclude that some of these things [digital coins] are securities," said Stump.

In the meantime, the supervisory authorities accelerated the enforcement measures against crypto players. Coinbase said in September that the SEC warned that it would sue the company if it were launched a product for lending digital assets that had ultimately scrapped it. Tether, the world's largest issuer of stablecoins, agreed to pay a fine of $ 41 million in October to clarify the claims of the CFTC that it had incorrectly presented their digital token as fully covered by dollars.

When submitting cases such as that that dealt with Tether, Stump said that the CFTC had "missed the goal" by not clearly explaining that it was not responsible for the daily supervision of the cassamous markets.

"We have given the public a wrong feeling of security if we put these cases without this clarification."

Stump also contradicted the idea that digital raw material products automatically fall under the case law of the CFTC, and emphasized that the daily regulatory responsibility of the agency encompasses derivatives to raw materials itself: "We do not regulate no cattle."

While the crypto supervision was important, the commissioner warned that it could possibly distract the focus from longer, complex cases in which products are more traditionally supervised by the CFTC, including conventional futures, options and swaps.

"I just want to make sure that we do not accidentally redistribute our resources that the other things we have concentrated on the background," said Stump. "If you have too many priorities.