Former Commodity Futures Trading Commission (CFTC) chairman Chris Giancarlo, known by some as Crypto Dad during his tenure from 2017 to 2019, spoke on the topic of U.S. crypto regulation at the Crypto Bahamas conference on Thursday. He called the current U.S. regulations, many of which were written in the 1930s, “nonapplicable” to the current financial reality of cryptocurrencies.
Giancarlo expressed concern that central banks were usurping crypto. “If you read the utterances out of the European Central Bank, there is nothing but FUD toward non-sovereign crypto,” he said, noting that China took the same approach when it banned all cryptos except the digital yuan CBDC.
After his service in the CFTC, the executive went on to found the Digital Dollar Foundation. Giancarlo said that regulation is being carried out against a backdrop of “septuagenarian leadership […] not just in the White House. It’s throughout the government.”
Giancarlo spoke on a panel with former CFTC commissioner Mark Wetjen, who joined FTX as head of policy and regulatory strategy late last year. Wetjen argued that U.S. regulatory agencies have “a fair number of authorities to massage the rules and figure out how to slot products into the regime.”
“What we really need to see, I think, is more entrepreneurialism and aggressiveness on the part of the staff at the agencies,” and leadership in the agencies to guide that approach, Wetjen said.
“The FTX application for the CFTC is an opportunity for the agency to do something innovative for itself,” Wetjen said, referring to the company’s proposal that it allow clearing of margined products directly by participants. “We’re not asking for any special treatment. Nothing of the sort. This is a model that can fit within regime.”
“What we’re offering, and what the application reflects, is the option […] for participants to come to the platform without any intermediary involved. But that’s an option.” Wetjen added:
“In other words, if brokers and intermediaries want to come to the platform and bring their customers, that’s also permitted.”
Wetjen characterized the FTX proposal as a “real-time risk model” and something that has not been seen before in the United States. The intermediated model is a uniquely American model, Giancarlo interjected, whereas crypto has emerged around the world.