CFTC official says regulators should give proper clarity before punishing crypto firm

The CFTC Commissioner said that Regulators should always give clarity on the matter before ordering any kind of punishment on the crypto firms. 

The most dominant regulators in the financial industry (crypto and non-crypto) of the United States are Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). SEC agency known for its action on the cash and spot market and CFTC is responsible for regulation over derivatives related markets. 

Stump is a commissioner in the derivatives market watchdog, CFTC. Recently she appeared in an interview with the Financial Times. 

Stump said that it is a very common thing for the regulators to take action against the companies and firms without guidance to follow the regulatory guidelines. 

Further Stump said that she is not happy with the action of CFTC on crypto companies without giving them a proper tool to follow the guidelines of the regulatory framework. She added: 

“What I discourage here at the CFTC is bringing enforcement actions without giving (crypto firms) the tools they need to be compliant,” 

To explain this matter with an example. Stump took the reference of the Kraken exchange case and said that the $1.25 million fine given to the Kraken exchange by the CFTC agency, for not registering as a futures broker, is a perfect example. 

She further asserted that the agency should not take action until they define the guidelines properly that are needed to be followed by the crypto firms. 

“I would have preferred that we would not have brought those types of cases until we had better defined how they might achieve compliance,”

These statements of the CFTC Commissioner indicated that there are some kind of wrong things happening to put negative pressure on the crypto firms. For example in the past, the Celsius network faced scrutiny warnings and was ordered to stop offerings. But the CEO of the Celsius network said that regulators are taking action without any reason because the Celsius network already has full license to operate the crypto services. 

 Similar kind of thing we saw with the lending product of Coinbase, got threatened by the SEC agency and finally, Coinbase exchange revoked the plan of lending services.

Read also: US House Committee hearing on crypto CEOs on 8 December