The Commodity Futures Trading Commission (CFTC) chair Rostin Behnam has expressed a willingness for the agency to become a primary regulator for cryptocurrencies. This statement was made during a recent Senate Agriculture Committee hearing focused on digital commodities oversight. The discussion revolved around the CFTC’s request for expanded regulatory authority in the realm of cryptocurrencies.
Senator Roger Marshall raised the question of whether it would be more efficient for the CFTC to take on a primary regulatory role for digital assets with a minor role left for the Securities and Exchange Commission (SEC). Behnam responded affirmatively, citing the agency’s capabilities, expertise, and experience in the field. However, he acknowledged that redefining securities and commodities would be necessary should the CFTC assume primary regulatory authority.
Behnam emphasized the importance of cooperation between the CFTC and SEC in defining the regulatory boundaries of assets. While he does not support the SEC unilaterally deciding which assets fall under the CFTC’s jurisdiction, he highlighted the historical collaboration between the two agencies in navigating grey areas. Concerns were raised about potential lawsuits due to conflicting asset designations, to which Behnam acknowledged the possibility but underlined the importance of a comprehensive contract listing system that aligns with the CFTC’s existing powers.
Behnam conveyed the CFTC’s eagerness to introduce tokens and contracts to regulated markets promptly to mitigate investor risks. He advocated for a significant portion of the crypto market to fall under the CFTC’s purview, particularly those assets that cannot be classified as securities. Behnam estimated that a substantial percentage of the crypto market does not fit the definition of securities, resulting in a lack of direct federal oversight. In order to establish a robust regulatory framework, Behnam suggested a budget of at least $30 million in the first year and $50 million in the second year, with funds allocated for staffing, administration, and IT infrastructure.
Senator Cory Booker’s concerns about the urgency of granting the CFTC enhanced regulatory authority were echoed by Behnam. He warned that without the necessary regulatory powers, fraud and manipulation in the crypto market could continue to harm individuals across the US. Behnam stressed the importance of swift action to prevent such negative impacts and uphold market integrity.
Behnam’s advocacy for the CFTC to assume a primary regulatory role in the crypto space underscores the need for a comprehensive and proactive approach to overseeing digital assets. By working collaboratively with other regulatory bodies and addressing potential legal challenges, the CFTC aims to establish a framework that safeguards investors and ensures market stability in the rapidly evolving world of cryptocurrencies.
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