Caroline Pham, a member of the United States Commodity Futures Trading Commission (CFTC), has raised concerns that a recent aggressive enforcement action in the crypto industry could lead to a conflict with the Securities and Exchange Commission (SEC).
In a statement on March 29, Pham expressed her belief that the CFTC may have overstepped its authority by including certain securities in its case against the cryptocurrency exchange KuCoin. The CFTC filed multiple charges against the company on March 26, alongside criminal charges from the U.S. Justice Department.
Pham stated, “The CFTC’s approach may encroach upon the SEC’s jurisdiction and undermine the strong investor protection laws that have been in place for decades. By conflating a financial instrument with a financial activity, it disrupts the very foundation of securities markets. Owning shares is not the same as trading derivatives.”
Pham’s concerns mirror those of many U.S. lawmakers and regulators who are grappling with the question of how the CFTC and SEC should regulate cryptocurrencies and determine whether they are commodities or securities. The two regulatory bodies have recently clashed over the classification of Ether (ETH), with crypto firm Prometheum planning to offer custody services for Ether as a security.
The CFTC’s complaint against KuCoin suggests that Ether is a commodity. However, if the SEC were to label ETH as a security, it could potentially impact the commission’s decisions on various spot Ether exchange-traded fund applications that are currently being considered.
In other news, KuCoin recently made headlines with its $10 million airdrop and a tweet that raised $37 million for a meme coin, as reported by Asia Express magazine.