Benzinga - Former chairman of the Commodity Futures Trading Commission (CFTC), Timothy Massad, on Monday, advocated for the creation of a self-regulatory organization (SRO) to oversee the cryptocurrency industry.
What Happened: In an interview with CNBC’s Jim Cramer, Massad said the need for regulation that does not require lengthy litigation processes.
He said, "Litigation takes a long time and, quite frankly, the crypto industry may find it's in their interest to stretch these cases out, because they may be hoping for a change in regulatory attitude with the 2024 election. The second reason is, it won't resolve all the issues that we need to get resolved."
The suggested self-regulatory organization (SRO) would be a collaborative effort between the SEC and CFTC. Its primary objective would be to establish fundamental standards pertaining to asset protection, fraud prevention, conflicts of interest, and reporting and record-keeping obligations for platforms involved in the trading of cryptocurrencies like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).
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Why It Matters: Massad emphasized that the regulatory group would be closely supervised by both agencies and would not consist of industry leaders setting their own standards. This solution aims to establish investor protection standards without needing significant changes to existing securities laws.
"This is a way to get investor protection standards into the industry as it exists today without having to fundamentally change the securities or the derivatives laws," he said.
This comes as the previous head of the Securities and Exchange Commission Jay Clayton on Monday stated that approval of a Bitcoin ETF could be a “hard to resist” prospect, acknowledging the significant strides made in the digital asset space.
He said that a well-defined regulatory framework could make the approval of an ETF more likely.
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