FTX's Sam Bankman-Fried Urges 'Federal Oversight of Crypto'
Godfrey Benjamin Jul 25, 2022 03:05
FTX co-founder and Chief Executive Officer Sam Bankman-Fried said some tokens could be classified as securities and those that are not, urging a federal oversight of the crypto industry.
Since the United States Securities and Exchange Commission (SEC) published a memo christening as many as nine different tokens listed on Coinbase Global Inc as securities, the entire industry has seen a polarising discourse about the take of industry leaders on the subject.
FTX co-founder and Chief Executive Officer Sam Bankman-Fried has shared his take on this and taking to Twitter, and he said some tokens could be classified as securities and those that are not.
Designating a token as security requires the issuers to register it with the SEC; legal obligations are attached to it. In the digital currency ecosystem nowadays, a number of blockchain startups present themselves as a decentralised entity when in reality, a particular firm is in charge of the issuance and administration of the tokens.
The SEC has taken a stance against this position but has not yet given clarity as regards how crypto firms can define if their token is a security or not. The commission and blockchain payments firm Ripple Labs Inc are currently in a legal battle as regards the state of XRP as a security.
The case's outcome is bound to set a precedent upon which many other crypto tokens will hinge their case on.
For Bankman-Fried, he believes by the time clarity is fully defined, the SEC will automatically be tasked with regulating securities. At the same time, the Commodity Futures Trading Commission (CFTC) is billed to regulate those not categorised as such.
He said he wants a federal oversight of the crypto industry, a move consistent with his role in lobbying regulators over the past few years.
It is unclear how the SEC is planning to approach the confusion tied to the status of the bulk of crypto assets. However, the commission is obligated to align with other government agencies to establish a regulatory framework to guide the industry in obedience to the Executive Order issued by President Joe Biden back in March.
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