Only One Rule for Crypto! John Deaton Pushes for SEC-CFTC Merger

Cryptocurrency advocate John E. Deaton has once again voiced the need for regulatory reform in the U.S. crypto market. A frequent critic of SEC Chair Gary Gensler, Deaton argues that the current patchwork of rules stifles innovation and creates confusion for businesses and investors alike.

This time, he’s proposing a bold and controversial solution: merging the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission) into one powerful regulatory body. Could this long-debated consolidation finally bring clarity to crypto regulation?

Why Consolidation is Needed

Speaking on Mornings with Maria, Perianne Boring, founder of the Chamber of Digital Commerce, highlighted how having two agencies oversee financial markets leads to inefficiency and confusion. Deaton agreed, emphasizing that a merger between the SEC and CFTC could eliminate overlapping responsibilities and resolve conflicts between the agencies.

This unified approach, Deaton argued, would provide clearer guidelines for businesses navigating securities and commodities regulations. It could also bring the U.S. in line with other countries that have a single financial regulator, boosting its competitiveness on the global stage.

The ‘Gray Zone’ of Crypto

Cryptocurrencies often fall into a gray area between securities and commodities, which has led to inconsistent regulatory treatment. Deaton believes that merging the SEC and CFTC would simplify compliance for companies and create a more consistent regulatory framework.

Elon Musk and Vivek Ramaswamy, both vocal supporters of Dogecoin (DOGE), are emerging as potential advocates for this idea. A unified regulator, they argue, could provide much-needed clarity for emerging technologies like blockchain and cryptocurrencies, encouraging innovation while protecting investors.

A Look at the XRP Case

Deaton pointed to XRP as a prime example of the problems caused by regulatory inconsistency. In 2015, FinCEN classified XRP as a virtual currency. However, five years later, the SEC declared it a security, leading to significant financial losses for investors.

Deaton believes a single regulatory body could prevent such contradictions and provide clearer guidance to the market.

Deaton also highlighted the need for consolidation in payments regulation. Currently, over a dozen federal agencies—including the Federal Reserve, FinCEN, and the SEC—regulate payment systems. A unified regulatory framework could streamline these processes, reduce bureaucracy, and make the U.S. financial system more efficient.

Congress Takes Action

On September 12, U.S. Congressman John Rose introduced a bill to establish a Joint Advisory Committee on Digital Assets. Part of the “Bridging Regulation and Innovation for Digital Global and Electronic Digital Assets Act,” the committee aims to foster collaboration between the SEC and CFTC.

The proposed committee would include at least 20 non-government members, such as industry experts, academics, and users, along with representatives from both agencies. Meeting twice a year, the committee would develop recommendations to harmonize laws, evaluate digital assets, and explore how blockchain can enhance efficiency and consumer protection.

Public responses from the agencies to these recommendations would ensure accountability.

A strong crypto advocate, Rose aims to replace “regulation-by-enforcement” with a cooperative framework that fosters U.S. innovation. His pro-crypto stance includes backing the FIT21 Act and opposing excessive government control over digital assets.

The future of U.S. crypto regulation hinges on bold moves—whether it’s consolidation or collaboration, change seems inevitable.