CFTC Should Oversee Crypto Spot Markets, Chief Reiterates Before Congress

Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam has made a caller entreaty to Congress to assistance his bureau authorization to oversee crypto spot markets successful the U.S.

Behnam, who became the agency's acting main past twelvemonth earlier being confirmed to a afloat word heading the national regulator, told the Senate Agriculture Committee connected Wednesday helium believes his bureau is champion placed to show trading, reiterating a stance helium archetypal took successful October. At present, crypto spot markets are mostly regulated astatine the authorities level. The CFTC oversees derivatives markets specified arsenic bitcoin and ether futures, and the Securities and Exchange Commission oversees tokens believed to beryllium securities, arsenic good arsenic stocks and funds.

"We are past the signifier wherever integer assets and decentralized fiscal technologies are a probe project, sandboxing what whitethorn travel successful the future. The issues are astatine the beforehand and halfway of our reasoning astatine the Commission successful summation to our accepted regulatory, oversight and enforcement responsibilities," Behnam said successful introductory remarks. "The CFTC is good situated to play an progressively cardinal relation successful overseeing the currency integer plus commodity market."

The regulator requested that Congress, successful summation to granting the CFTC further authority, besides money the bureau with an other $100 cardinal to decently oversee crypto markets. The agency's existent yearly fund is astir $300 million.

The added funds would spell toward gathering up interior expertise arsenic good arsenic amended enforcing the law, Behnam said. During the proceeding helium said a ample portion of enforcement actions travel from tips and whistleblowers astatine present, arsenic 1 example.

Behnam said the bureau does not presently person each of the expertise it needs to decently oversee crypto. In effect to a question from Sen. Kirsten Gillibrand (D-N.Y.), Behnam said his squad does not presently person capable resources oregon cognition to show and support against cyberattacks successful the integer plus sector.

However, successful a follow-up effect to Sen. Amy Klobuchar (D-Minn.), helium said helium would beryllium consenting to physique up his team.

One of the cardinal issues Congress would person to code is conscionable wherever the CFTC's jurisdiction ends and wherever the SEC's begins. Behnam acknowledged this during a treatment with Sen. John Hoeven (R-N.D.), saying it is important to gully "clear, chiseled lines" betwixt which crypto assets are securities and which are not.

"The astir noticeable spread is what constitutes a information and what constitutes a commodity," helium said, adding that "at its core, we are a marketplace regulator ... we would physique up expertise successful places we request it."

The Dodd-Frank Act betterment of accepted markets successful the aftermath of the 2008 fiscal situation is simply a "perfect example" of the benignant of enactment the CFTC could prosecute successful for the crypto markets, helium said. The Dodd-Frank Act helped betterment derivatives markets (among others) implicit the past decade.

In summation to his remarks, Behnam besides filed a effect from the CFTC to a bid of questions antecedently published by the Senate Agriculture Committee, reiterating the aforesaid arguments astir however the crypto marketplace should beryllium regulated astatine the national level.

"In my opinion, determination are important principles missing from the existent regulatory model applicable to integer plus markets that we spot successful different federally regulated markets, peculiarly ones that chiefly cater to retail investors," Behnam wrote successful the document. "A national regulatory authorities whitethorn guarantee that definite safeguards are successful spot to code the risks to idiosyncratic investors, marketplace integrity and systemic stability. Those safeguards could see pre-trade and post-trade transparency and azygous standards astir settlement, information reporting, cyber information and leverage."