The United States’ two top trading regulators on Wednesday asked Congress for more direct jurisdiction over cryptocurrency trading.

Securities and Exchange Commission (SEC) Chairman Jay Clayton and Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo asked lawmakers for “direct oversight” of internet-based cryptocurrency trading platforms only subject to state rules.

“A key issue before market regulators is whether our historical approach to the regulation of currency transactions is appropriate for the cryptocurrency markets,” Clayton and Giancarlo wrote in a Wall Street Journal op-ed published Wednesday.

ADVERTISEMENT

“We would support policy efforts to revisit these frameworks and ensure they are effective and efficient for the digital era.”

The SEC and CFTC are the two main regulatory agencies charged with policing the expanding world of cryptocurrencies and the financial products they’ve created. While the agencies have power to police cryptocurrency trades and investments, state government have jurisdiction over most platforms used to purchase and hold the digital currencies.

The SEC has focused on cryptocurrencies offered as securities, often through “initial coin offerings,” or ICOs. Companies have flocked to raise capital through ICOs, selling units of an in-house cryptocurrency akin to the way other corporations sell shares.

“Through statements, reports and enforcement actions the SEC has made it clear that federal securities laws apply regardless of whether the offered security—a purposefully broad and flexible term—is labeled a 'coin' or 'utility token' rather than a stock, bond or investment contract,” the chairmen wrote.

The SEC has insisted that such ICOs qualify as securities and have cracked down on unregistered, fraudulent and misleading offerings. The agency is also probing publicly traded companies that have pivoted to blockchain technology, the distributed ledger system that serves as the foundation of cryptocurrencies, as investors flock to find the next major crypto startup.

ADVERTISEMENT

“Distributed ledger technology may in fact be the next great disruptive and productivity-enhancing economic development,” the chairmen wrote. “But we will not allow it or any other advancement to disrupt our commitment to fair and sound markets.”

The CFTC has focused on trades of individual cryptocurrencies, such as bitcoin and Ethereum, and the expanding web of derivatives and futures offered by exchanges. The agency has also brought charges against several individuals and firms that have fraudulently used or marketed cryptocurrencies to prey on the wide gulf between investor interest and education.

The chairmen wrote that as the Chicago Board of Exchange and CME Group added cryptocurrency futures, they boosted margin requirements and disclosure requirements at the CFTC’s request.

“As a result, the CFTC gained oversight over the U.S. bitcoin futures market and access to data that can facilitate the detection and pursuit of bad actors in underlying spot markets,” the chairmen wrote.