Avalanche Policy Coalition urges SEC, CFTC to fold crypto into existing market rules

Core Viewpoint - The Avalanche Policy Coalition proposes that U.S. regulators can effectively supervise crypto spot markets by extending existing regulations to include these new instruments, rather than creating a new regulatory framework [1]. Group 1: Regulatory Framework - The coalition's proposal aims to empower the SEC and CFTC to authorize regulated intermediaries to trade spot crypto [1]. - Crypto, while different from traditional financial instruments, still operates within an electronic trading framework that regulators and market participants are familiar with [2]. - The proposal consists of two stages, starting with exemptive relief, allowing regulated entities to trade spot crypto after certifying appropriate safeguards [3]. Group 2: Implementation Process - Under the exemptive relief approach, firms must file a certification with the SEC and CFTC detailing their policies and procedures for customer protection before trading [4]. - During the transitional phase, firms will be subject to regulatory examinations, enabling regulators to observe crypto trading within the existing market infrastructure [4].