Former CFTC Chair Timothy Massad proposes combining the Securities and Exchange Commission and Commodity Futures Trading Commission into a single regulator for digital assets. In a Brookings Institution article, he suggests President Trump could advance this long-discussed merger. Massad warns that current congressional proposals risk undermining securities regulation.
Timothy Massad, former Chair of the Commodity Futures Trading Commission and a senior fellow at the Brookings Institution, outlines in a recent article the benefits of merging the SEC and CFTC to create a unified markets regulator with a dedicated digital-asset mandate. He argues this approach would resolve the fragmented oversight that currently complicates crypto regulation, avoiding the need for new token categories that could weaken traditional securities rules.
Massad expresses concern over ongoing congressional market structure proposals, which he believes are influenced by the crypto industry to favor existing business models. "The main thing that concerns me is the potential for the proposals that are now being considered to undermine regulation of securities, to undermine traditional market regulation, because of the way they define this new category of assets," he writes. He adds, "I think those provisions are being driven by the crypto industry. I think they are designed to promote existing business models and to promote the technology when the law should be technologically neutral."
Instead of binary classifications of tokens as securities or commodities, Massad advocates viewing them on a continuum, with regulatory obligations varying by use. A merged agency could refine taxonomies and disclosure rules over time as technology evolves. "It makes much more sense to say, the two agencies should get together because they can refine that taxonomy and the disclosure rules over time, and make changes as the technology develops, the market develops, and the use cases change," he states. "That's much better than having Congress lock in definitions today based on what they're hearing from industry lobbyists today."
On illicit finance, Massad insists the industry abandon notions of anonymous high-value transactions. "Anyone who thinks we're going to rebuild the financial system on the basis of anonymous wallets, or even pseudonymous wallets and peer to peer transactions, is kidding themselves," he says. He proposes a digital-identity framework for privacy-preserving verification and calls for stablecoin issuers to monitor on-chain activity and report suspicious transactions.
Massad, despite past criticism of Trump's crypto involvement, sees potential in his administration to push the merger forward, especially amid current legislative momentum on digital assets.