Constructing a regulatory structure for cryptocurrencies

Abstract

This chapter examines the debate over cryptocurrency regulation. It analyzes whether this new asset class can be regulated in a way that will not inhibit its growth. It considers the viability of applying the historical “functional” regulatory model for financial services to cryptocurrencies. It also considers the application of specific jurisdictional assignments to the SEC and CFTC by Congress, as was done in the case for stock index contracts that were regulated on the basis of whether they were traded on stock or commodity exchanges. This chapter explains why SEC regulation of cryptocurrencies as securities will cripple, if it does not destroy, that market. This chapter further describes why the CFTC’s regulatory structure is more in keeping with crypto market trading platforms. It sets forth the reasons why the “actual delivery” exclusion in the CEA should be retained so that this asset class may develop and evolve without undue restrictions.