US Congressman Darren Soto said in an interview with the financial news “Cheddar” on January 10 that most cryptocurrencies should not be supervised by national securities regulators.
Soto believes that cryptocurrencies should be regulated by the Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC) and should not be classified as securities regulated by the Securities and Exchange Commission (SEC).
Democrat Soto is a member of the House of Representatives in the ninth district of Florida, and this winter he worked with Congressman Ted Budd to lead the two parties to create a cryptocurrency-friendly regulatory environment for the country.
Soto believes that unless the cryptocurrency is a real security, the application of the Federal Securities Act will cause some damage to the market. In response, he said that it is necessary to more clearly define the scope of the agency’s responsibilities and create a more accurate classification of cryptocurrencies.
“We will leave the SEC to real securities because we know that most of the cryptocurrency sector is commodity and currency trading. The Commodity Futures Commission and the Federal Trade Commission are both light-touch regulators, and we have reached consensus Both believe that the regulation of these two institutions is more applicable to most cryptographic assets and transactions of such assets.”
The main reason why Soto opposes strict regulation is also to maintain the global competitiveness of the United States, because he knows that various positive measures are being taken in countries such as Malta and Barbados to promote the development of the encryption industry. Soto said:
“We often take it for granted that the US dollar is the foundation of the world economy, and the US dollar has been creating greater stability and more advantages… But with the wider adoption of cryptocurrencies, this advantage may slowly disappear… Therefore, we need to be more aggressive and take more measures to make the country a cryptocurrency transaction and a fertile ground for such technology companies.”
There are no specialized regulators in the United States to regulate cryptocurrencies, and regulators have long debated which ones to link virtual currency to mass goods or securities. The Commodity Futures Trading Commission has classified some of the major cryptocurrencies, such as Bitcoin, into mass commodities.
At the same time, several other well-known regulators in the United States claim that most of the cryptocurrencies sold through the first token issue (ICO) will be treated as securities and will therefore be covered by the Securities and Exchange Commission. According to Howey Test, securities refer to investing in a common business, and investors want to get a certain profit from that business (through the efforts of others).
The US Internal Revenue Service stated that for federal tax purposes, the agency decided to treat cryptocurrencies as property.