Former CFTC Chair Urges Regulation In Light of Ripple Court Ruling
Former CFTC Chair Timothy Massad stated that, despite a recent decision in favor of XRP, he did not believe the SEC or CFTC would change their approach to pursuing enforcement cases.
A former United States Commodity Futures Trading Commission (CFTC) chair says his plea for regulatory clarity remains unchanged. At the same time, the Securities and Exchange Commission v. Ripple court verdict may affect how corporations and lawmakers approach crypto.
Timothy Massad and former SEC Chair Jay Clayton claimed in an op-ed published on July 7 in The Wall Street Journal that SEC and CFTC moves against crypto businesses were “unlikely to bring about a significant improvement in investor protection and market integrity quickly.” The remarks came after a federal court in the SEC v. Ripple lawsuit gave a judgment that favored the blockchain business by saying that the XRP coin was not a security.
Massad argued that the judge’s statement that institutional investors Speaking to Cointelegraph on July 17. “reasonably expected that Ripple would use the capital it received from its sales to improve the XRP ecosystem and thereby increase the price of XRP” didn’t necessarily limit the scope of the Howey test, the standard by which the SEC recognizes security. The former CFTC head stated that Congress or the SEC might intervene if there were any problems with Ripple’s holdings. The SEC could consider appealing the judge’s ruling.
The former CFTC head stated, “This clearly shows that we cannot create a crypto regulatory framework solely through enforcement,”
Massad said that despite the decision to remove XRP from their purview, he believed that the number of enforcement proceedings initiated by the SEC or CFTC would remain the same. He suggested that the two regulators collaborate directly or through a self-regulatory organization to create guidelines for cryptocurrencies intended to protect investors and the market.
The former CFTC head claimed that the case might provide some American lawmakers who had previously been hesitant to pursue measures that might affect the market incentive to do so. House Financial Services Committee members are now discussing a current market structure bill. On July 12, Senators Cynthia Lummis and Kirsten Gillibrand reintroduced legislation to establish a thorough regulatory framework for digital assets. Says Massad:
“[The Ripple ruling] has made our argument more compelling and more urgent, meaning that we can’t just rely on enforcement to get the kind of investor protection standards we need.”
From 2014 to 2017, Massad presided over the CFTC as President Barack Obama of the United States. He has previously advocated for regulators to approve a spot Bitcoin BTC transaction.
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Exchange-traded funds, the introduction of a digital currency issued by the US central bank for payment use, and regulatory clarification as the cryptocurrency market expands.
