In a compelling interview with CNBC’s Jim Cramer, former chairman of the Commodity Futures Trading Commission (CFTC), Timothy Massad, made a strong case for the establishment of a self-regulatory organization (SRO) to oversee the rapidly growing cryptocurrency industry. Massad, along with former SEC chairman Jay Clayton, recently outlined their proposal in the Wall Street Journal, advocating for basic standards and regulations to address asset protection, fraud prevention, conflicts of interest, and reporting requirements for Bitcoin and Ethereum trading platforms.
Massad emphasized the need for a parallel track of regulation that does not solely rely on lengthy litigation processes. He pointed out that litigation can be protracted, and the crypto industry may exploit this delay, hoping for a change in regulatory attitude following the 2024 election. Moreover, he stressed that ongoing litigation and the ambiguous classification of cryptocurrencies as securities complicate the resolution of critical industry issues.
Former chairman of the CFTC Timothy Massad proposed a new way to regulate crypto and protect investors without waiting years for lawsuits to conclude.https://t.co/vMamT342Js
— Mad Money On CNBC (@MadMoneyOnCNBC) July 11, 2023
The proposed SRO would be closely supervised by both the SEC and the CFTC, ensuring that industry leaders do not set standards solely for their benefit. Massad highlighted that this solution would establish essential industry standards without the need for extensive revisions of securities and derivatives laws, which could inadvertently create unintended consequences and loopholes.
Massad’s proposal represents a pragmatic approach to enhancing investor protection and setting industry standards, all while navigating the complex landscape of cryptocurrency regulation.
