Urgency builds around crypto's regulatory clarity in the U.S.

Driving the news: "I'd wave a magic wand tomorrow and start defining some of these things," Rep. Darren Soto (D-Fla.) said Tuesday morning.

• Similarly, Christy Goldsmith Romero, a newly appointed commissioner with the Commodity Futures Trading Commission (CFTC), said, "I am certainly of the opinion that I would like Congress to act."

State of play: At the top level, entrepreneurs in the cryptocurrency industry and their billionaire backers have long complained that they don't have any idea what is or isn't against the rules in the U.S.

• At the grassroots, many investors have done very well investing in cryptocurrency but many others have lost life changing amounts of money.

At both levels, people are calling for government leaders to catch up.

Zooming out: The big question facing governments right now is this: are the rules that already exist for investors adequate to the task of managing cryptocurrency markets? Or should lawmakers and regulators start fresh?

• The answer so far: TBD.

What they're saying: Soto, who co-chairs the Congressional Blockchain Caucus, said he would "start defining" terms relevant to the cryptocurrency industry.

• He was speaking to his view that crypto tokens and coins could be "a commodity, a security, a currency — it could even be a future. Trying to fit it into a 20th century box didn't work and isn't working now," he told Axios' Hope King.
• "This is an example where existing laws are just antiquated," he said.

Soto appeared to express frustration at the pace of legislation, expressing regret that most of his colleagues want to get the administration's take on these questions before writing new laws.

• "Our job is to pass new laws to evolve to what society has," he said.
• Meanwhile, Soto described the light touch approach that he and his colleagues on the Blockchain Caucus would prefer.
• "We want to make sure we have guard rails for the most blatant frauds you can see, like pump and dump," he said, rather than going further and trying to protect people against market risk.

Soto declined to specifically endorse the recent legislation from Senators Lummis and Gillibrand, but he did note, "We definitely agree that the SEC jurisdiction should be narrowly defined."

Yes, but: Goldsmith-Romero described the task of those working under existing legislative authority now — the agencies — as attempting to see what's ahead. "I think we're looking into the future and asking where we should build the road," she said.

But they are doing so blind, she complained.

• Victims and whistleblowers are the chief way agencies find out where to look for trouble in the crypto industry right now, she said.
• "The CFTC doesn't have any regulatory authority. We can't look at books and records," she said.
• "We've got a pretty sizable market that's essentially unregulated. Regulators have no window into it," she went on.

Nevertheless, she said, the CFTC has taken something like 50 actions in the space and also enabled 11 crypto-focused products to trade in the markets it regulates, under its mandate to enable responsible innovation.

The bottom line: "If regulation fails to keep pace with technology, the most vulnerable people are going to be hurt," Goldsmith-Romero said.

Watch the full event here.