According to Carol Goforth, the Clayton Little Professor of Law at the University of Arkansas, the U.S. Commodities Futures Trading Commission (CFTC) has been helpful for crypto consumers and entrepreneurs. Goforth said this while commenting on a report that revealed that almost half of the cases brought before the CFTC in the 2023 fiscal year involved digital assets.
In a discussion with Coin Edition, the professor noted that from the perspective of legitimate crypto entrepreneurs, as opposed to fraudsters who admittedly do operate in the space, the primary problems stemming from increasing regulatory oversight in the U.S. do not come from the CFTC. According to her, the CFTC has been actively watching for fraud in the crypto markets and compliance failure with registration requirements for businesses selling derivative contracts based on crypto assets.
Goforth thinks the CFTC’s approach has been reasonable, considering there is a path to compliance for crypto derivative platforms under the regulator’s watch. She noted that research has indicated that the market tends to react positively to efforts to stamp out fraud and encourage reasonable business practices.
The law professor believes the issue is not with the Financial Crimes Enforcement Network (FinCEN), even though some crypto-purists object to the degree of oversight imposed and loss of privacy under the Bank Secrecy Act and related regulations.
Goforth noted that the crypto industry’s problem is the Securities and Exchange Commission (SEC), which is far more active in enforcement actions and often targets companies for failure to register even in the absence of fraud. Their “enforcement” unfortunately seems to be more likely to shut down crypto entrepreneurs, no matter how well-thought-out and intentioned the underlying business model is. She doesn’t see any problem with that when the offering is fraudulent, but not when legitimate businesses are clamped down for ‘minor’ issues.
The professor thinks long-term, reasonable regulation is necessary and good for the crypto ecosystem. She believes that either the CFTC or SEC could provide that oversight, but to date, outside the context of fraudulent claims and representations, the CFTC has been more helpful for consumers and entrepreneurs.
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