CFTC Chairman Urges Congress to Enact Cryptocurrency Regulations

Rostin Behnam also told Congress that under the current regulatory framework, Bitcoin and Ethereum can only be considered commodities.

CFTC Chairman Rostin Behnam said before Congress that legislation is urgently needed to provide regulatory clarity to the crypto industry to ensure investors are properly protected.

Behnam made the statement while testifying before the Senate Agriculture Committee on March 6 to discuss the CFTC’s fiscal year 2025 budget request.

“The idea that cryptocurrencies are going away is wrong,” Behnam said.

He further noted that in the 12 months ending in October 2023, more than 49% of CFTC lawsuits involved conduct related to digital assets, although “no federal agency currently directly regulates the crypto industry.”

Develop framework within 12 months

During the hearing, Behnam mentioned the challenges and opportunities posed to the crypto market by the digital assets Bitcoin (BTC) and Ethereum (ETH), which account for a significant proportion of the total market capitalization.

He pointed out that regulators and lawmakers may have a misunderstanding that the relevance of the digital asset market may weaken. However, the past decade has made it clear that this view is wrong, as demand for these assets has grown exponentially during this time.

Behnam emphasized the need to proactively enact legislative measures to ensure a stable and transparent regulatory environment. He added that protecting investors should be the government’s top priority, given the huge interest in digital assets since the beginning of the year.

Behnam said that if Congress passes the 21st Century Financial Innovation Technologies Act (FIT Act), it will take the CFTC about 12 months to develop a comprehensive regulatory framework for digital assets.

The FIT bill, which has passed the Senate Agriculture and Financial Services Committee but has not yet reached a floor vote, aims to clarify regulations regarding regulatory responsibilities for digital assets.

BTC, ETH belong to commodity

In her testimony, Behnam also responded to questions from committee members about whether digital currencies are commodities or securities, a distinction that affects regulatory jurisdiction.

In response to a question from Congressman John Duarte, Behnam explained that digital assets are often considered commodities if they are deemed not to meet the standards required to be securities, illustrating the nuanced approach required to effectively regulate these assets.

Behnam added that while Bitcoin and Ethereum cannot be classified as securities, they do not meet the criteria to be considered commodities, meaning they are automatically classified as commodities, despite being very similar to physical commodities such as gold or corn. Big difference.

The CFTC chairman told Duarte that there is huge interest in Bitcoin from retail and institutional investors, regardless of whether governments want to legalize it.

Behnam acknowledged that regulators have been trying to shoehorn cryptocurrencies into other frameworks and that the industry needs to be considered independently.

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