Coinbase has proposed a significant regulatory shift, advocating for the U.S. Commodity Futures Trading Commission (CFTC) to assume full authority over spot cryptocurrency markets. If implemented, this move would curtail the influence of the Securities and Exchange Commission (SEC) in the sector.
Coinbase’s Legislative Push
Faryar Shirzad, Coinbase’s chief policy officer, recently submitted a proposal to Congress urging swift action on regulatory clarity and consumer protections. His six-point legislative plan includes granting the CFTC full oversight of the crypto spot market.
“Digital assets like Bitcoin and Ethereum are commodities, not securities. Legislation must empower the CFTC to oversee the crypto spot market, ensuring transparency and protecting consumers from fraud and manipulation,” wrote Shirzad.
Balancing the SEC’s Role
While advocating for reduced SEC influence, Coinbase acknowledges the agency’s importance in certain areas. Shirzad suggested that Congress establish SEC rules for capital raising, ensuring blockchain projects have clear funding pathways without all tokens being classified as securities.
Industry Support for CFTC Oversight
Many within the crypto industry and Republican lawmakers support shifting oversight to the CFTC. Notably, Representatives Glen Thompson and Tom Emmer reintroduced the Digital Commodity Exchange Act in 2022 to give the CFTC regulatory authority over digital assets.
Former CFTC Chair Chris Giancarlo has also urged the Senate Agriculture Committee to endorse CFTC oversight. Meanwhile, reports suggest President Donald Trump is considering granting the agency jurisdiction over the sector.
Wresting Control from the SEC
Currently, the SEC regulates spot crypto markets, although it has acknowledged Bitcoin and Ethereum as non-securities. Former SEC Chair Gary Gensler previously argued that most cryptocurrencies fall under SEC jurisdiction due to their structure. However, the agency abandoned an investigation into Ethereum’s status in mid-2024, potentially to avoid further legal setbacks.
With growing political and industry support, the push for CFTC oversight could redefine cryptocurrency regulations in the U.S., providing long-sought clarity to investors and developers alike.