CFTC seeking more authority to regulate crypto
Rostin Behnam, acting chairman of the CFTC, urged the Senate's committee to expand its crypto authority. According to the chairman, the agency's primary responsibility should be to regulate crypto markets.
In his testimony to the Senate Agriculture Committee, CFTC's acting chairman said that the commodities regulator is fully prepared to become the primary federal regulator for digital assets if Congress broadens the agency's remit.
"The CFTC has responsibly and aggressively been pursuing enforcement cases in the digital asset marketplace for a number of years now," Rostin Behnam said.
The regulator emphasized the size of the crypto market, noting that market capitalization is now approximately $2.7 trillion, 60% of which is commodities.
He adds, “I think it’s important for this committee to reconsider and consider expanding authority for the CFTC.”
His statement contradicts Gary Gensler, the chief of the SEC, who has asserted that crypto assets are securities. Gary Gensler has reportedly been pressing for more regulatory control over stable coins.
The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have traditionally been the key regulatory players in the digital asset industry. The Securities and Exchange Commission is in charge of overseeing the trading of securities, which are assets that are traded with the prospect of future earnings. CFTC is in charge of crypto derivatives markets and fraud in the underlying spot market.
Since Bitcoin and Ethereum, the two largest crypto assets by market cap can neither be classified as securities, the crypto space is in a regulatory grey area.
The Securities and Exchange Commission (SEC), the CFTC’s securities counterpart, has also been working to oversee the crypto market. The SEC has approved new bitcoin futures exchange-traded funds (ETFs) under Chairman Gary Gensler, who entered office earlier this year, increasing retail exposure to the digital asset market.
Gensler has stated that he feels the SEC is best positioned to be the primary regulator of cryptocurrency.
The majority of cryptocurrency trading platforms are regulated at the state level, which means they must obtain money transmitter licenses in each state where they do business, a method criticized by industry advocates.
CBW - External Analyst