Key Takeaways
- She noted there is no clear process for DeFi firms to register or gain formal recognition
- The Commissioner expressed concerns that court decisions are being used to shape policy,
U.S. Commodity Futures Trading Commission (CFTC) Commissioner Summer Mersinger emphasized the need for standardized crypto regulations. She was giving a speech at the North American Blockchain Summit on November 21.
Mersinger pointed to recent enforcement efforts, such as the case against Uniswap Labs, to illustrate the challenges of this approach. The CFTC had alleged that Uniswap Labs illegally offered leveraged or margined retail commodity transactions in digital assets. Following this, Uniswap was asked to pay $175,000 as a civil monetary penalty.
The Commissioner expressed concerns that court decisions are being used to shape policy, an outcome she believes creates unnecessary uncertainty for both regulators and the industry. “How you’re going to treat an entity—that’s a policy question,” Mersinger said, highlighting the need for a more deliberate process. She further called for a more structured approach to policymaking, moving away from the current reliance on enforcement actions to guide regulatory decisions.
She noted that while crypto firms, including those in decentralized finance (DeFi), are often categorized under existing legal frameworks, there is no clear process for these entities to register or gain formal recognition. According to Mersinger, this gap leaves companies without the guidance they need to comply with the law effectively. Enforcement settlements, she said, often fail to provide sufficient clarity for industry participants seeking to operate within the rules.
A recent case involving a decentralized autonomous organization (DAO) demonstrated the difficulties in applying traditional classifications to emerging technologies. The CFTC sought to determine whether the DAO could be classified as a corporation or an association. Mersinger suggested that a more comprehensive regulatory framework could help avoid such situations and reduce reliance on litigation to establish policy.
“ I really started to get uncomfortable with this idea that we were kind of setting some sort of policy through our enforcement cases and through going to court. To me, how you’re going to treat an entity that’s a policy question.”
She also warned of potential jurisdictional conflicts between federal agencies, suggesting that overlapping responsibilities could create confusion. Citing the example of the Federal Communications Commission (FCC), she noted the risks of unrelated regulatory bodies applying rules that may not align with the cryptocurrency sector’s unique needs.
Mersinger encouraged proactive engagement between industry stakeholders and policymakers, particularly as new government leadership takes shape. She urged crypto firms to initiate discussions early, saying, “It’s critical to start knocking on doors from day one.” Despite her traditionally cautious regulatory stance, Mersinger acknowledged the need for new laws tailored to the crypto industry and highlighted the CFTC’s capability to oversee crypto markets without causing disruption.
