CFTC Chairman: Dismissing the Idea of Cryptocurrencies Disappearing is a Misconception, Congress Must Act on Crypto Regulations

CFTC Chairman: Dismissing the Idea of Cryptocurrencies Disappearing is a Misconception, Congress Must Act on Crypto Regulations

CFTC Chairman: Dismissing the Idea of Cryptocurrencies Disappearing is a Misconception, Congress Must Act on Crypto Regulations

According to a report by The Block, Rostin Behnam, the Chairman of the U.S. Commodity Futures Trading Commission (CFTC), has once again urged lawmakers to take action and grant the agency new powers over the industry, as cryptocurrency-related issues are consuming CFTC’s resources.

Behnam testified before the House Agriculture Committee on Wednesday, stating that over 49% of CFTC’s enforcement actions in the 2023 fiscal year were related to digital assets, and the market is still growing. He mentioned that a market they do not directly regulate occupies half of their enforcement cases, and it’s not just the enforcement department’s resources that are being consumed. “We need experts from different departments to collaborate on cases,” he said.

Behnam also highlighted the recent increase in cryptocurrency values and the optimism of retail investors, calling it a “warning event” and emphasizing the need for a regulatory framework. He stated, “This has nothing to do with the legalization of the technology; it is about protecting the American public and investors.”

In July of last year, the House Agriculture Committee and the House Financial Services Committee jointly pushed for the passage of the “21st Century Financial Innovation and Technology Act.” This bill would give more responsibility to the CFTC and provide guidance for the transition of digital assets from securities to commodities. However, due to a lack of necessary support, the bill has little chance of passing and being submitted to the President’s desk.

Several lawmakers questioned during the hearing on Wednesday whether CFTC would be able to quickly implement its regulatory framework if the bill were to advance. Behnam stated that the agency would need a year’s time and also added that the recent record-high Bitcoin prices highlight the necessity for action to be taken.

Behnam was also asked about whether Ethereum (ETH) is considered a security or a commodity. He stated that Ethereum is a commodity, and the regulators at the Securities and Exchange Commission (SEC) have not provided a clear stance on this matter.

Prior to this, cryptocurrency platform Prometheum obtained a special purpose broker-dealer license from the SEC last year and announced last month that its subsidiary, Prometheum Capital LLC, would offer custody services for Ethereum. Republican Congressman Zach Nunn from Iowa expressed concerns that the SEC might use this opportunity to bypass Congress and even the CFTC, further confusing participants who have already entered this field.

Behnam mentioned that he has not communicated with Prometheum, but he stated that the decision to provide custody for Ethereum is the company’s independent decision, not the SEC’s decision.