CFTC chairman admits regulation must keep up with innovation

Speaking at the digital LA Blockchain Summit, Commodity Futures Trading Commission chairman, Heath Tarbert, said U.S. regulation lags behind crypto and blockchain.

"I would be the first to agree with you that innovation is unlikely to come from the government," Tarbert told interviewer Anthony Pompliano on Oct. 7 as part of an event segment on the role of digital securities in the derivatives market.

Since the birth of the crypto and blockchain industry roughly 11 years ago, U.S. regulation in general has failed in keeping pace with the quickly developing sector, often using a heavy handed approach.

Many regulatory growing pains seen in the crypto space relate to the Securities and Exchange Commission, or SEC, although regulation as a whole has some catching up to do.

Tarbert assumed his role as CFTC chairman in July 2019, joining the scene amid significant technological advancement following closure on the 2008 market downturn.

The CFTC desires "To promote the integrity, resilience, and vibrancy of U.S. derivatives markets through sound regulation," Tarbert said, quoting the mission statement.

"Of those, vibrancy is the one that gets at the innovation, gets at the innovation point that we don't want our markets to be stale, we want them to be continuing to develop and be innovative."

The current landscape appears contrary to this stated desire for innovation.

U.S. traders still have a difficult time as many crypto exchanges ban U.S. participants, fearing the country's stiff regulatory scene.

Crypto derivatives exchange BitMEX is one of the most recent examples of these related consequences.