Pham says the CFTC can regulate crypto without new laws, citing a statute that excludes onions

Pham's case starts with the definition, and the definition is wide. The Commodity Exchange Act covers goods, services, rights and financial interests that can be traded through derivatives contracts, and it excludes two things: onions and movie box office receipts ^[7]. The CFTC's own glossary confirms both exclusions ^[8]. According to Pham, speaking at TOKEN2049 Singapore, that breadth gives the agency jurisdiction over a wide range of commodities without Congress passing an entirely new law ^[5].

We think the definition is the easy half of the argument. As crypto.news points out, being a commodity does not hand the agency unrestricted authority over every transaction, because what the agency can do turns on the kind of activity at issue: derivatives, fraud, market manipulation, or certain leveraged retail transactions ^[9]. That is four kinds of activity ^[14], and the October 5 notice sits on the last of them, leveraged, margined and financed retail transactions ^[3]. A rule built there has a specific statutory home. A rule aimed at anything outside it would have to find another, and that is where a no-new-law reading would first be tested.

It has not been tested yet. The notice is a request for comment, and no final text exists ^[2]. From here the outcomes are easy to list: comments could keep the agency inside the leveraged retail category, in which case Pham's wider claim is never needed and never proved; the agency could draft beyond it, in which case the claim meets an actual rule; or Congress could take the subject back, as the stalled CLARITY Act leaves possible ^[4]. We think she is on firm ground for the first and unproven for the second. A final rule that reaches beyond leveraged retail trading and stands without new legislation would prove us too cautious.

Pham no longer writes the rules, having left the acting chair's seat ^[1]. She is MoonPay's chief legal officer and chief administrative officer ^[6], and the article does not say whether the company would use the registration route that Chairman Selig describes ^[12]. The agency's drafting effort is going into a route firms can choose to take, and none into a mandate that, by Selig's own account, needs a statute ^[11].