The regulatory situation for the United States and cryptocurrency has been complicated. Multiple entities are in charge of regulating the environment, and the lack of approval so far from the Securities and Exchange Commission (SEC) for a Bitcoin exchange traded fund (ETF) has been arduous for applicants. So far, the regulator has expressed clear apprehension about approving any of these requests, but there’s been little information about the reasons behind it, apart from market volatility.

A recent event, known as

“The Year Ahead for Capital Markets, commented about a week ago, where the SEC and the Commodity Futures Trading Commission (CFTC) were able to speak on the ETF market and Bitcoin futures.

Hester Peirce of the SEC, who is sometimes affectionately known as Crypto Mom, voiced her entity’s stance on Bitcoin ETFs, explaining, “At the SEC we’ve been unwilling to … sign off on a bitcoin ETF, an exchange-traded product based on bitcoin. My concern about our approach in that area is it looks a little bit like a merit-based approach judging the underlying bitcoin markets.”

Based on the current regulatory situation in the market, Peirce has expressed her belief that it is like other markets in that they “aren’t regulated but we nevertheless build products on top of them.” She added, “I think we have to be very careful with that kind of reasoning.”

In the last year or so, the SEC has rejected any of the Bitcoin ETFs that have come their way, including proposals by the Chicago Board Options Exchange (CBOE) and the Gemini Exchange. CBOE’s application has been resubmitted since their original rejection, and it is pending review at the moment.

CFTC Commissioner Brian Quintenz also spoke at the conference, but in regard to Bitcoin futures. He said, “We have a process in the Commodity Exchange Act that allows the exchanges to self-certify a contract if they believe it meets the requirements of the Act.” He added, “[The CFTC] has a review period in which we can say no we disagree with you and here’s why, but if we don’t disagree, [then] they have the opportunity to go ahead and self-certify that contract. [Both CBOE and CME Group] pursue that self-certification [route] so these contracts get listed without our approval but also without our disapproval.”

Bitcoin futures were launched in the market in 2017 by CBOE and CME Group, which helped the entire market to reach the best numbers of its lifetime. However, this height wasn’t sustainable, as Bitcoin and all altcoins are less than 20% of their original value since December 2017. In September, the Bitcoin futures also saw some damage as the crypto winter caused a massive loss of trading.

The two regulators have been battling against each other for quite some time about which entity should regulate the cryptocurrency market. Overall, the SEC has substantial control over the initial coin offering (ICO) market, though the CFTC runs the show for both Bitcoin and Ethereum. The big difference is the defining traits of each that categorize them as either commodities or securities.

Clarifying this difference, Quintenz said, “We only have fraud and enforcement jurisdiction over the commodity space. Our oversight jurisdiction is over the commodity derivatives space, so the trading of commodities themselves like things like eBay we don’t have any type of oversight over that. Because of our lack of statutory oversight capability, I’ve suggested that these platforms come together to form some type of self-regulatory structure where they can discuss, agree to, implement, and hopefully examine or audit themselves.”

Peirce has seen the resistant regulatory measures on all of these crypto assets, saying that the market’s issues are “too confusing,” passively suggesting that a collaboration could help. He said, “[This is] an area where I think Brian and I are interested in working together.”

Turning her attention to Quintenz, she added,

“There [are] questions about where your jurisdiction ends and ours begins and again we don’t want to have overlap there so you know my main concern has been that I think we need to do a better job providing guidance.”

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