Former Federal Prosecutor: Crypto Regulation Bill ‘Still Pretty Vague’

Former federal prosecutor Grant Fondo has said legislation that aims to provide clarity on which U.S. agency should be in charge of crypto regulation isn’t getting the job done yet.

Fondo, who at one time was a prosecutor for the Northern District of California, said the bill is “still pretty vague,” CoinDesk reported Monday (Aug. 8).

He said there aren’t really any clear boundaries between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission on how crypto should be regulated.

This comes as there’s been a push by some important U.S. senators to give oversight of crypto to the CFTC, which regulates commodities. However, the current bill is unclear on whether tokens are considered securities or commodities, and the SEC looks over securities.

According to the bill, bitcoin and ether are commodities, which would put them under the purview of the CFTC, Fondo said. But in previous statements, SEC Chairman Gary Gensler has claimed his agency already has the power to regulate most tokens — which he claims constitute securities.

Fondo said non-fungible tokens (NFTs) fall into a “different bucket” as the SEC has said they’re not securities, and that NFTs would have to be offered as “traditional financial products” to change that. The bill would have to set more concrete boundaries about what agency regulates which tokens, the report noted.

There have been a number of discussions as to how crypto should be regulated, and Sen. Elizabeth Warren recently put out a letter arguing that a pro-crypto ruling that allows banks be more involved with digital assets needs to be revoked.

Read more: Sen. Warren Issues Rallying Cry to Counter Crypto’s Influence Over Banks

The rulings gave banks permission to custody crypto for clients, hold stablecoin reserve accounts and use stablecoins to make payments and settle transactions.

Warren said letting them stand would not be going far enough. Because of various collapses and bankruptcies around digital assets, Warren said banks have been exposed to “unnecessary risk” and that they don’t properly address how much risk there is with the tokens.

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