- As lawmakers get closer to passing comprehensive legislation, CFTC chairman Rostin Behnam has advocated for additional financing and regulatory authority to monitor bitcoin spot markets.
In remarks made prior to the Senate Agriculture Committee’s oversight hearing on digital commodities, Behnam said his organization is in a good position to act as the main cryptocurrency watchdog.
Behnam asserted that the CFTC possesses the knowledge and ability to oversee a regulatory framework, citing an Illinois court decision that categorized Bitcoin (BTC) and Ethereum (ETH) as digital commodities. Behman informed the guests that in order to accomplish this, the commission needs more tools and resources.
Senator Cory Booker said, “We’ve heard again and again that the CFTC and SEC lack resources and tools they need to conduct oversight in this huge market.” He was advocating for the clarification of U.S. crypto rules and the granting of more powers to the CFTC.
Stepping up the creation of a regulatory framework
In the midst of a turf battle between the Securities and Exchange Commission (SEC) and the Consumer Financial Protection Bureau (CFTC) over which organization should oversee the emerging industry, policymakers are stepping up their attempts to develop a regulatory framework for cryptocurrencies.
One major source of dispute is operational capacity: the SEC employs 4,500 individuals, while the CFTC employs around 700. Despite this discrepancy, digital assets or cryptocurrency fraud have been involved in more than 50% of CFTC lawsuits.
For an agency in charge of a trillion-dollar market to devote half of its resources on a market it neither regulates nor receives funding for is a startling number. According to Behnam, it shows the widespread fraud in the cryptocurrency field and puts both markets at risk.
Though he emphasized the need for a new system with precise regulations defining commodities and securities, the chairman of the CFTC voiced confidence in the agency’s capacity to supervise the cryptocurrency markets.
Nevertheless, according to Behman, 70–80% of cryptocurrencies are not securities. The head of the SEC, Gary Gensler, has often expressed the opposite view, claiming that the majority of cryptocurrencies are already covered by federal regulations. Gensler effectively categorizes the majority of the industry under securities laws, despite the regulator’s refusal to state as much.
Bill to delegate CFTC crypto supervision
Senator Debbie Stabenow, the chair of the committee, notified other legislators about a plan that would give the CFTC official regulatory supervision over cryptocurrency.
Senator Stabenow claims that rather than concentrating on DeFi, the bill primarily addresses centralized platforms such as cryptocurrency exchanges. It would enforce cybersecurity compliance from digital asset service providers and capital reserve policies.
Additionally, the CFTC would have constitutional authority and recurrent financing to monitor digital commodities markets, including cryptocurrency spot markets, under Stabenow’s plans. Senator Stabenow is pressing the terms of the measure in Congress even though she is set to step down in January 2025. She stated that committee members should receive language packages by Friday.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
