YouSaid · the spoken record

Brian Quintenz

lines on the record: 33
first: 2023-09-25
most recent: 2023-09-25
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“It would have been interesting to be a market participant. Interesting is an understatement. And interesting, it was also interesting to be at the agency, and that was an understatement. But I Look, just like people, agencies aren't perfect and the marketplace isn't perfect. And sometimes you create rules because you have experienced something that went wrong and you don't want to have it happen again. The idea is that you create those rules where you don't also preclude innovation from happening. And that's what we hope happens in crypto, that we fight the bad and promote the good.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“It was surreal. It was somewhat insane to be at a regulatory agency where you saw price actions like that. It unfortunately took us a little while to understand how and why that occurred. And I think there were, like everything, it's not unfortunately a simple issue. You had a roll between one futures contract and the next. You had a widely held view that supply capacity was filling up, right? And so there wasn't anywhere to be able to put new supply. You had very large short positions in the marketplace. And then you had some activity allowable activity in the particular contract that had an outsized impact.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“Should be able to be published and should be able, individuals should be able to access it. But if there is a business that operates a front end that provides, facilitates, accept orders for, then it may require a different regulatory treatment. It shouldn't have to be prohibited, but there could be a regulatory touch point there that ensures bad things don't happen. If there's a jurisdiction that can land a regulatory regime like that, I think you will see a lot of interest in it. And in my view, it's an open question as to whether or not that innovation will ever come back to the United States if it leaves.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“I mean, it's a big question. Right now, we have international regulatory bodies, standard setting bodies like the FSB, like IOSCO, like BIS that are putting out very negative views of DeFi. But yet we do have jurisdictions that have deliberately punted on how to and if to and how to approach DeFi. The EU did that through MICA, even though there are a few things in there that I think may not be as clean as we would hope. The UK is doing that, where they're specifically focusing on centralized intermediaries in the crypto ecosystem before they look at decentralized software and how it operates. And we're engaged with all of them because we have a view that the software”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“There can be a lot of benefits to DeFi based derivatives. The self-executing kind of clearing model of over-marginalization is a very efficient tool for what it's designed to do, which is to take human behavior out of the equation and managing defaults. There are some downsides to it. And I don't know that it will replace the legacy clearing model. But in my view, individuals should be free to choose which one they want to use. And the CFTC has not so far done anything about trying to understand if and how they can bring that kind of market into the regulatory fold. And we've also seen a lot of international jurisdictions punt on the idea of looking at DeFi, which frankly is a more valuable and correct position than just taking one off enforcement actions and filling press releases with a bunch of authorities that don't exist.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“So, I mean, I think that speaks to a few cases that the CFTC recently brought. And in my view, the press releases were very aggressive in terms of how they were trying to identify responsible individuals for that. And that aggressiveness extended to simply programming something that could allow contracts like that to trade. In my view, there has to be much more substantial direct involvement in the creation of those contracts and accepting orders for those contracts or soliciting funds for those contracts. So much more centralization, much more centralization control, you don't have to make fees off of it, but feeing off of that activity, all of those things, I think, would be in Disha of something that the CFTC... But I'm also a believer that.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“To be a market regulator Would be a market regulator over a derivatives contract on crypto. The reason we haven't seen more derivatives contracts on crypto is because the SEC is refusing to state that those crypto tokens can be in the CFTC's jurisdiction for the purposes of futures contracts. But yes, ideally there are a lot more futures contracts and swaps contracts on crypto currencies and crypto assets because they are incredibly valuable risk management tools and price discovery tools. And they've served the legacy commodity markets extremely well. And so we are holding up responsible risk management by the refusal of the agencies to successfully adjudicate this issue. So ideally Congress will come in. And ensure that we know where and how tokens fall along those lines.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“And so, do you think that for CFDC to be a regulator, there would have to be a futures contract? Because 20,000 cryptocurrencies, maybe there can be regulated futures contracts on a lot of them, but maybe not all of them.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“So it's both. Okay, okay. It's both. If Ether was classified as a security, then a futures contract on ETH, on a security, would have a completely different regulatory regime than the CFTC's futures regulatory regime, which is what ETHER exists under as of now. In addition, There have been multiple court cases that have said ether is a commodity, and therefore it's under the CFTC's jurisdiction. Now, the SEC can always come after the fact and say, okay, now we think it's a security. They have to prove that in court, and they would also have to show why they didn't take action against how ETH futures contracts are currently regulated because they would have been violating the law.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“Thank you. And when you said earlier that Ether is under just jurisdiction of this CFTC, is it Ether the token itself or is it just because they're a futures contracts and those futures contracts are obviously what they're registered with the CFTC and they're on the CME by definition right now? So it's both. Okay, okay.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“Deferred to an agency's interpretation of the law, even though the law was ambiguous in what it said. And that standard has allowed agencies to basically read in new authorities to somewhat ambiguous statutes. If that is a case that gets overturned and that precedent goes away, you have a very strong statement that the error of agencies trying to create their own authorities is over.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“Yes, and there's actually a major questions doctrine concept that floats around when you talk about the Supreme Court whether or not an agency is taking an action that needs to be reserved for Congress because of how major of an issue it is, how much economic activity economic activity it impacts. There's also something called Chevron Deference, which the court is actually revisiting this upcoming term, which was based off of the Chevron case from, I think, 1984, the early 1980s, where the case at that time”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“Absolutely. And actually, my mistake, which you corrected, I think your correction perfectly highlights your view is you believe that the CFTC should not, or SEC should not create powers for itself and be activists, that it should, if it is given new powers, it should be given those by Congress.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“Brought something like that online with our financial promotions regime that applied to crypto that is very strict. And while I think that there may be some that are going to have a hard time complying with it, and we'll see how the implementation and enforcement of it goes, at some point, I think we want the innovation to speak for itself. I don't think it's necessarily positive for the community to base its hope off of influencers and peddlers. So we'll see if Congress takes that and runs with that. There have been some discussions there. And I think that that could be interesting.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“I think in your example of rug pulls, it's a good question. I think it just really just depends on what the facts and circumstances are and whether or not there's enough evidence to show that people really didn't get what they had been promised. And was it a marketing issue? When does a marketing issue turn into a fraud issue? And so I think in terms of getting those authorities, That's why there has been discussion in Congress about marketing regimes associated with crypto assets so that you can try to create some level of liability for people that go out there and promote things that they know are fraudulent or that they are designed to deceive people. The UK”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“As fraudulent transactions in the spot commodity market because people have created or not even created, pretended to create some crypto token that they go out and celest a lot of money for and abscond with it. So look, there are bad actors in this ecosystem, but they're not bad actors because of the crypto ecosystem. They are just bad actors. And they get attracted to whatever sector where there is a lot of enthusiasm and subignurance and ambiguous regulatory lines. And so the best thing that we can do to create a more market with more integrity is to pass clear jurisdictional lines that empower these agencies to actually use their authoritely.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“Where the CFTC has a more limited set of authorities that are purely enforcement is over spot commodity transactions, the exchange of a commodity for cash. And there it only has anti-fraud authorities, anti-manipulation also, but really, truly anti-fraud authorities. So the example we were just talking about, if I was selling what I claimed were bars of gold to people and they were just gold painted bars of soap and I made a lot of money on it and I left town, that would be a case the CFTC could bring even though it doesn't involve a derivatives contract. It involves fraudulent sales of commodities. And so if we see and we have seen, and I think it's good that they've been doing this and continue to do this, we do see fraudulent activity in the sale of made up fictitious crypto assets. And they have brought those cases. They have brought cases.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“Well, so the CFTC when I was there prosecuted a lot of spoofing cases, which was a new authority that was granted to it by Dodd-Frank where a person is on both sides of an order book trying to affect the price in one direction that beneficially impacts a previous position. There are a lot of different kinds of examples of manipulative practices. You could be trying to influence a settlement index at the point of settlement by banging the clothes, which is really heavily getting involved in the expiration time of that contract so that you move the index enough to really impact a different position. It's marking market-based trading activity.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“So the CFTC is a market regulator, right? So their purview is over the derivatives marketplace. Derivatives are contracts that create exposure to something, either a physical commodity or swapping exposure between commodities like interest rates, fixed versus floating, and so on and so forth. Because they are a market regulator, they design rules and systems that try to create safety and soundness for the intermediaries that exist, for the clearinghouses that are clearing products, for the exchanges that are listing contracts, for anti-manipulation issues in the marketplace.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“So, I think it's trying to send a message. I think it's using the weight of the government to go after smaller entities with lower fines to entice them to settle so that maybe the facts of the actual complaint are narrower, but it provides them a megaphone in the street corner to try to shout a message that then confuses the public around what they can and can't do and what the CFTC may actually be targeting or is concerned about. It is very clear in my mind that you cannot hold an individual accountable for purely publishing code if it is broad-based and has broadly applicable purposes. But yet the CFTC In this recent press release claimed that it could and that because the code was designed to allow someone to do something, therefore the people that created that code were in violation of law. That's just wrong.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“It would be much more positive if the agency decided to take a policy approach to this as opposed to an enforcement approach. And I think that's consistent between both the CFTC and the SEC. I just think there have been fewer cases in the fewer enforcement cases in the CFTC's purview that have shown us the unproductive tendencies of messaging enforcement actions.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“So I have really strong mixed feelings about the CFTC at this point. I feel like on the one hand, they're trying to advertise themselves as being a responsible regulator over innovative products and trying to show that they have a strong rule set, which they do, that protects market customers. But at the same time, they are putting out enforcement press releases that are targeting respondents, companies, for activities that they don't have jurisdiction over, that they would, in my view, lose in court over, and that they shouldn't be claiming they have any authority to handle.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“And what do you think about the CFTC's role when you were a commissioner there, you wanted to, the CFTC, to take a bigger role and not have the B2B, the SEC, but how would you characterize the current viewpoint of the CFTC and their actions with regards to crypto?”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“And I don't see it stopping in the near term. I see it stopping either one's Congress acts or once a court acts or once there's someone with a different perspective and willing to provide positive leadership that's in those roles at the heads of those agencies.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“So, yeah, I think that was why I was fairly negative in my assessment of the current landscape. Because of how detrimental the overreach has been to the ecosystem here in this country that appear to be aggressive jurisdictional land grabs as opposed to ensuring, I mean, we have to remember regulatory agencies work for the American people. They don't work for themselves. They're not little kingdoms or castles or fiefdoms. They are charged by Congress to execute a mission on behalf of the American public. And they owe it to the American public to be very clear about what their rules are and why they are taking certain actions and meet the minimum obligations that Congress has set in being able to do so. And they have not been doing that. Impact of all of those actions, all of that lack.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“One likes being the tip of the spear. But what we have to realize is that this is bigger than crypto. This is the government needing to act appropriately and within the bounds of the law. And we need to be the tip of that spear, not only for us, but for everybody else. And I've seen a wonderful conviction in this space to be willing to do that.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“And where are those lights, right? Those lights are in the Progress Congress is making in passing legislation that seeks to clarify these tough terms and this jurisdictional issue. This progress is being made in the courts where courts are striking down agency actions as illegally violating the APA that they said did not meet the most basic requirements of an agency action. The agency exceeded its authority in doing something, striking down agency actions where the agency claimed the law was clear and the court has said it absolutely is not clear and you can't claim it's clear when it's not clear. And I think we're going to see more of those things. There are going to be more rules, I think, that will be finalized that are going to receive more court challenges from the industry. And I said this today.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“Give us a very bad grade at the moment, but I think I did agree that there were some very bright, strong lights that you can see in the distance. And I think we're moving towards those lights in a fairly quick fashion. But there's damage that's being done along the way. So how quickly can we achieve that? How quickly can we get there?”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“This is not supposed to be an end around our end run around our securities laws and markets. But there are plenty of tokens in the whole ethos of the ecosystem striving towards decentralization really negates the original purpose of those securities laws. And the reason they exist and how they actually were meant to operate. However, if that process, that marketplace, that issuance is outside of the SEC, the question is, you know, should it be somewhere else to try to provide a market with integrity that protects consumers, that appropriately supervises centralized intermediaries, right? So we don't have continued failures like FTX, and we can bring, you know, Regulatory specificity to this market so that both centralized and decentralized concepts can exist.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“There are a couple aspects of this. The first is that securities laws have existed for a very long time to do a very specific thing that they are very good at. How those rules and laws are being applied now, I think a lot of us strongly disagree with, but their original intent was to ensure that investors that invested in a company and received some interest in that company, consideration for that interest, and relied on the efforts of a management team for a return, had adequate proper disclosures and had markets with integrity that they could be able to transact. I don't think anyone wants a new law to be created or a new regime to be created for someone like a Goldman Sachs to go out and say, well, I really wanted to issue stock, but I'm just going to go issue a token.”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“And what framework would you want in a perfect world? Who would be the primary regulator for cryptocurrencies and how would it be clear? Because as we're talking about the CFTC, they regulated if there's a futures contract on it. But if someone has a protocol and there's no futures contract, from where does the CFTC get its authority?”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“Confusion out there, which is exactly why we believe that legislation is so critically important and the fit for the 21st century act that passed both the House Financial Services Committee in a bipartisan way and passed the House Agriculture Committee in a unanimous fashion that really takes and answers the hard questions that have existed, which is where are the right buckets and for what reasons what does a fully functional network mean? What does it mean to be decentralized so we can at least start trying to provide that clarity, which is going to be so critical to building the future of the internet here in this country?”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT
“Think to your question around who has authority for what. At this point, I think it's fair to say that we just don't know. And if I'm confused about that as a former commissioner, how can innovators and entrepreneurs expect to be able to stop their life, put their reputations on the line, give up their nights and weekends with their family to dedicate themselves to a vision or accomplishing a dream of building a company where they have no idea if all of a sudden some agency is going to just decide out of thin air to create an enforcement action against them because the lines are unclear? I mean, right now we have Ether Futures contracts trading within the CFTC's jurisdiction and the chair of the SEC refusing to say that ETH is not a security. I mean, how can there be any more”
2023-09-25 · Forward Guidance · Former CFTC Commissioner Brian Quintenz On Crypto Regulation · IDENTIFIED FROM THE TRANSCRIPT