SEC-CFTC merger will simplify crypto regulations, John E. Deaton reveals

Vocal crypto advocate John E. Deaton has revealed the need to merge the Securities and Exchange Commission (SEC) with the Commodity Futures Trading Commission (CFTC) to simplify crypto regulations. The issue of regulating the crypto market has become a widely discussed subject in the United States, with experts and advocates alike giving their opinions.

However, Deaton thinks the way forward will be to merge the SEC and CFTC into one big organization for effective regulations. He has been critical of SEC chairman Gary Gensler, who he describes as a ‘Bad Faith Regulator’ in the past.

This was due to Gensler’s stifling crypto regulations and his unwarranted legal actions against crypto firms like Ripple and Coinbase. Deaton gave his opinion while replying to a post on X where Digital Chamber CEO Perianne Boring was discussing how Trump’s crypto vision could help the United States’ regulatory clarity.

John E. Deaton makes his case for joint regulatory bodies

On the morning show with Maria, Boring made a case of the confusion and conflicts it causes the financial markets by having two separate regulators oversee their activities.

Deaton, in his post on X, agreed with Boring, highlighting the confusion and inefficiency it causes for the agencies. He said that by merging both regulators, they would be able to eliminate overlapping responsibilities and conflicts that have risen in the past. It would also make it easier for firms, helping them follow the rules.

Outstanding job by @PerianneDC on @MorningsMaria with @MariaBartiromo discussing how @elonmusk and @VivekGRamaswamy’s @DOGE may want to push for merging the @CFTC & @SECGov.

There’s a strong case to be made for merging the two agencies. Merging the SEC & CFTC would eliminate… https://t.co/dLdSSVXyxs

— John E Deaton (@JohnEDeaton1) December 13, 2024

Deaton also mentioned that the move will also help the agencies provide a consistent and straightforward approach to making rules for securities like stocks, and commodities like Bitcoin and other assets.

He believes that grey areas in the financial market should be removed, and having one regulator would help the United States achieve this. “This would simplify compliance for market participants, especially as financial products increasingly blur the lines between securities and commodities,” he said.

The United States in a competitive global crypto market

John E. Deaton also mentioned the need for the United States to step up its regulatory clarity, highlighting the competitive global crypto market.

Meanwhile, Elon Musk and Vivek Ramaswamy of the newly established Department of Government Efficiency (D.O.G.E) could be the mouthpiece and advocate achieving the much-needed merger. Aside from the merger providing clear and precise regulations in the market, it could also help the country cut costs by reducing funds allocated to them.

The new merger would also assure crypto investors and firms alike of a new dawn in the country. With the pro-crypto Paul Atkins set to replace the outgoing Gary Gensler as SEC Chair, there is already optimism in the country about the direction of the crypto sector under the new administration. Adding the merger of these two organizations would only bolster that optimism, helping the industry in the long run.

John E. Deaton also touched on the payment sector, noting that it is another area that needs work. He highlighted the federal agencies overseeing the payment sector, pointing out that there are over a dozen.

With a unified agency, which would bring about a unified regulatory framework, these agencies would be streamlined to achieve more efficiency. He used XRP as an example, noting that the FinCEN said it was a virtual currency in 2015, only for the SEC to say it was a security years later.

This is not the first advocacy for a joint relationship between the SEC and CFTC, with Congressman John Rose submitting a proposal to foster collaboration between both bodies on September 12.

In the ‘Bridging Regulation and Innovation for Digital Global and Electronic Digital Assets Act,’ the committee will involve experts, and users to help the agencies streamline laws that will enable efficient use of blockchain technology and consumer protection.

The committee will comprise 20 members of non-government staff and a representative of the SEC and CFTC. The meetings will be twice annually, with their recommendations requiring public input to foster transparency.

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