Caroline Pham says CFTC can regulate crypto without Congress

In short

• Caroline Pham, ex-CFTC commissioner and now MoonPay's chief legal officer, says the CFTC can regulate crypto without new legislation, according to The Block.
• Pham said the Commodity Exchange Act covers nearly everything as a commodity, except onions and film box office receipts.
• The CFTC proposed its first crypto market rules on 5 October, after the CLARITY Act failed a Senate vote in September.
• Chairman Mike Selig told CNBC on 6 October he was "absolutely disappointed in Congress" and would act without lawmakers.

Caroline Pham , a former commissioner at the US Commodity Futures Trading Commission and now chief legal officer at the crypto payments firm MoonPay, says the CFTC can regulate cryptocurrencies through its own rulemaking without new legislation from Congress, according to The Block. She said the Commodity Exchange Act, the law that created the CFTC and sets its powers, is broad enough to treat nearly everything as a commodity, according to The Block.

The CFTC is the US regulator for futures, options and swaps, the contracts traders use to bet on or hedge the price of a commodity. Pham's argument is that its founding law already reaches most digital assets, so the agency does not need Congress to pass a crypto-specific statute first.

What Caroline Pham says the CFTC can do

Pham said the exceptions are narrow. According to The Block, she named onions and box office receipts from motion pictures as the things the Commodity Exchange Act does not cover, and said there are few areas beyond the CFTC's reach. The Block's report does not say when or where she made the comments.

Why the CLARITY Act failure matters

Her claim lands in the middle of a live fight over who writes the rules for crypto in the US. The CLARITY Act, a bill meant to set out how digital assets are classified and supervised, failed a Senate procedural vote in September, and the CFTC has since moved on its own.

CFTC chairman Mike Selig told CNBC on 6 October that he was "absolutely disappointed in Congress" for failing to deliver crypto market legislation, and said the agency would not wait for lawmakers, according to finance.yahoo.com. He described the proposals as a "federal option" for crypto exchanges. Selig also said on Thursday 8 October that federal regulators are moving ahead with new crypto trading rules despite the CLARITY Act failing, according to msn.com.

How far the CFTC can go alone

There is a limit to how far the agency can go on its own. The Commodity Exchange Act limits the CFTC's rulemaking to the powers it grants, and a rule has the force of law only inside those constraints, according to finance.yahoo.com. Only Congress can require every US crypto exchange to register federally, though the same report says voluntary sign-ons from major platforms could narrow the gap without new legislation.

What other former officials say

Pham is not the only former CFTC official making this case. Brian Quintenz, also a former CFTC commissioner, told the TOKEN2049 conference in Singapore on 8 October that the SEC and CFTC could still deliver significant clarity without Congress, according to CoinNess. He also said barring agency staff from holding crypto is an absurd rule, since regulators cannot grasp technology they may not use, and he now sits on the board of Nasdaq-listed SUI Group Holdings.

One reader's take spread on X. IOTY Protocol (@Ioty_protocol) said on X that "agency rulemaking has way more teeth than people think".

Questions readers ask

What did Caroline Pham say about CFTC crypto regulation?

Caroline Pham, a former CFTC commissioner now chief legal officer at MoonPay, said the CFTC can regulate cryptocurrencies through its own rulemaking without new legislation from Congress, according to The Block. She said the Commodity Exchange Act is broad enough to treat nearly everything as a commodity, except onions and film box office receipts.

What still needs Congress to act?

Only Congress can require all US crypto exchanges to register federally, according to finance.yahoo.com. The CFTC's two proposals would require only leveraged-trading exchanges to register federally, while spot exchanges stay under state oversight. The same report says voluntary sign-ons from major platforms could narrow the gap without new legislation.

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What to watch: The CFTC's two proposals, on leveraged retail trading and on registering crypto platforms as a new kind of federal exchange, are now out for comment.