CFTC Commissioner Caroline Pham Criticizes Her Own Agency After KuCoin Charges, “Aggressive” Enforcement Action
CFTC Commissioner Caroline D. Pham issued a statement Friday seemingly criticizing her own agency for its latest “aggressive enforcement action” following the agency’s KuCoin charges, saying it might “infringe upon the SEC’s authority.”
While Pham commended the independent government agency’s “vigilance” in “protecting” U.S. markets through the KuCoin charges, she expressed concern that the move may overstep the CFTC’s role in crypto regulation.
“The CFTC’s approach may infringe upon the SEC’s authority and undermine decades of robust investor protection laws by conflating a financial instrument with a financial activity, disrupting the foundations of securities markets,” Pham said in the statement. “Owning shares is not the same thing as trading derivatives.”
CFTC charged the cryptocurrency exchange KuCoin on Tuesday, alleging that the digital asset firm engaged in a wide range of illegal activities, including dealing in off-exchange commodity futures, offering unregistered leveraged or margined transactions, and improperly soliciting orders.
Equally important, the federal agency claims that the crypto exchange did not adequately implement know-your-customer (KYC) procedures, calling them a “sham” that “did not prevent U.S. customers from trading commodity interests and derivatives on the platform.”
The CFTC and the U.S. Securities and Exchange Commission (SEC) have long fought over who would lead the country’s regulatory approach in the cryptocurrency sector.
The CFTC typically regulates commodities, while the SEC traditionally controls securities.
In a similar yet separate criminal matter on Tuesday, the Department of Justice (DOJ) hit KuCoin with its own set of charges, including “violating the Bank Secrecy Act” and
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