WASHINGTON, D.C.— Dennis Kelleher, Cofounder, President, and CEO, issued the following statement regarding reports that the U.S. Senate Committee on Agriculture will resume consideration of the Digital Commodities Consumer Protection Act (DCCPA), which some claim is “tough.”
“The Digital Commodities Consumer Protection Act (DCCPA) was fully supported by FTX and its now criminally convicted CEO Sam Bankman-Fried and others in the crypto industry. That’s because it would put the smallest, weakest, least funded, and most easily capturable agency, the CFTC, in charge of regulating and policing the crypto industry when it doesn’t have the capacity, expertise, or funding to do the job. Additionally, the bill also limits the jurisdiction and authority of the SEC, the real cops on the crypto beat that the crypto industry fears and is desperately trying to avoid. This bill endangers investors, consumers, and financial stability, and it would de facto allow the crypto industry to pick their regulators.
“This bill would be a gift to the crypto industry and an apparent reward for all the money it has spent on lobbying and campaign contributions, which have continued to flood the political system even after the bankruptcy of FTX, the loss of billions of dollars in investor and customer money, and the conviction of Sam Bankman-Fried. That’s true even though crypto’s RAP sheet continues to get longer by the day, with Binance and its CEO Changpeng Zhao (CZ) recently charged with numerous shocking crimes by the Justice Department, crypto ransom attack payments hitting a record of $1 billion in 2023, and innumerable other examples of lawbreaking. Lawmakers must seriously consider whether they want to reward and legitimize crypto through the DCCPA while de facto leaving it unregulated.
“Specifically, as detailed in a letter Better Markets sent to the Senate Agriculture Committee last year regarding the DCCPA, the bill would expand the definition of a commodity and narrow the definition of a security, effectively expanding CFTC authority while limiting the SEC’s authority and impairing its ability to crack down on crypto crooks. The bill would also allow crypto exchanges to self-certify their products and sell them to retail investors without adequate independent review. Given the industry’s history of blatantly and repeatedly breaking or ignoring the securities and commodities laws, this will undoubtedly invite more lawbreaking while impairing the SEC’s ability to police it. Moreover, it does nothing to address the chronic underfunding of the CFTC, which doesn’t even have the resources to adequately fulfill its current statutory mandates, much less new mandates added on top.
“The CFTC must receive a very substantial, multiyear increase in funding that would enable it to undertake any additional responsibilities before any legislation expanding the duties of the CFTC are considered. Moreover, notwithstanding numerous very serious concerns, if Congress decides to enact any legislation regulating the crypto industry, it must carefully ensure that the CFTC and the SEC each fully retain their current jurisdiction and authority to regulate and police the commodities and securities markets, which have well-served Americans, the financial system, and the economy for many decades.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
