KEY POINTS
- Behnam said last month some crypto assets constitute commodities under existing laws
- He also acknowledged the ongoing turf war between CFTC and SEC
- Behnam said the approval of Bitcoin ETFs introduces risks
In less than a month after the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin exchange-traded funds (ETFs) in the country, Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam raised significant concerns about the newly approved cryptocurrency investment vehicle and called for a federal-level legislation to regulate the dynamic cryptocurrency landscape.
During a recent address at an American Bar Association event, Behnam expressed his concerns, stating, “I fear that the regulatory approval of bitcoin ETPs introduces risk that, in spite of yellow flags, market participants, retail and institutional alike, may mistake the technical approval of a product—with actual regulatory oversight of the cash commodity digital assets.”
“The concerns I have publicly voiced for the better part of six years regarding the digital asset commodity spot market have only become magnified,” Behnam said. “The need for federal legislation over cash market digital assets has never been more critical, and I will continue my call for action,” he added.
Benham further shone a spotlight on the agency’s proactive engagement in regulating the cryptocurrency space. He noted a noteworthy statistic: nearly half of all CFTC actions filed in fiscal year 2023 were pertained to digital asset commodities. This statistic underscores the CFTC’s unwavering dedication to ensuring compliance within its jurisdiction.
Although the CFTC’s direct authority over digital asset spot markets is limited, these actions underscore the agency’s steadfast focus on upholding market integrity and safeguarding investors in the dynamic and often volatile cryptocurrency sector.
Last month, Benham, during his interview with “Squawk Box,” emphasized that “under existing law, many of the tokens constitute commodities,” providing a noteworthy source of regulatory clarity concerning cryptocurrency assets in the United States.
Behnam also acknowledged the existence of a “turf war” among regulatory bodies, underscoring the ongoing competition over the authority to regulate the burgeoning cryptocurrency industry.
At the time, he highlighted the intricate regulatory challenges confronting the cryptocurrency industry and emphasized the pressing need for expeditious legislative measures.
“It is figuring out how existing, decades-old law, fits into this new technology that seems to be changing and ultimately needs a new way of thinking around policy and legislating,” says @CFTCbehnam on #crypto. “Under existing law, many of the tokens constitute commodities.” pic.twitter.com/F3JPjWq3wG
— Squawk Box (@SquawkCNBC) December 12, 2023
He noted that “members in Congress are trying to figure out the landscape,” underlining the ongoing efforts within Congress to navigate the evolving regulatory terrain in the cryptocurrency space.
When asked about his relationship with the SEC, Behnam highlighted the constructive rapport between the CFTC and the SEC, underscoring the shared commitment of both agencies to safeguard U.S. markets, the nation’s financial ecosystem, and the interests of consumers.
It is noteworthy that CFTC Chair Behnam and SEC Chair Gary Gensler hold divergent views regarding the classification of specific cryptocurrency assets, reflecting the ongoing discourse and variability in regulatory perspectives within the crypto industry.
