Gary DeWaal And Daniel Davis Advocate For Crypto Spot Market Regulation – Commodities/Derivatives/Stock Exchanges

In articles that ran in Bloomberg Law and Global Investor
Group’s FOW (Futures & Options World),
Financial Markets and Funds attorneys Gary DeWaal and Daniel Davis
called on Congress to “adopt meaningful and comprehensive
crypto legislation.”

For Bloomberg Law, Gary examined recent market
turbulence and how it has renewed debate over federal regulation of
crypto. He suggested that the Commodity Futures Trading Commission
(CFTC) and the Securities and Exchange Commission (SEC) should keep
regulating crypto assets and activities under existing law, and the
CFTC needs exclusive authority over the spot market in new
legislation. It also is noted that the CFTC has the advantage, (1)
citing recent enforcement actions; (2) it’s an efficient change
given the CFTC’s existing plenary jurisdiction over derivatives
trading involving virtual currencies; and (3) that as a
principles-based regulator, the CFTC is best-situated to respond
most rapidly to changes in technology and practices to ensure
maximum customer protection. Read “This Is How the SEC and CFTC Should
Regulate the Crypto Markets.”

Gary and Dan reflected in FOW on the December 1 Senate
hearing on the recent collapse of FTX and pending crypto bills,
noting that Congress needs to quickly “adopt meaningful and
comprehensive crypto legislation.” With any one of three
bi-partisan, comprehensive bills on the table, Congress could
potentially grant the CFTC exclusive jurisdiction to regulate
intermediaries and transactions involving spot virtual currencies;
requires the segregation of customer assets at such entities; and
imposes customer protection requirements on such firms equivalent
to the types of obligations imposed routinely on intermediaries in
the regulated derivatives and securities industries today. They
cited other notable investment scandals in history, indicating that
while it is not possible to prevent all instances of fraud,
ensuring that one regulator — the CFTC — oversees spot
crypto industry registrants would go a long way to ensure customer
protection is at the forefront. Read “Congress needs to prioritise customer
protections in crypto.

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