Rostin Behnam, the head of the US Commodity Futures Trading Commission (CFTC), has reaffirmed that BTC and ETH, the two leading cryptocurrencies, should be classified as commodities. This declaration supports the CFTC’s case for extended regulatory control over these digital assets to better protect investors.
During his testimony before the US Senate Committee on Agriculture, Nutrition, and Forestry on July 9, Behnam emphasized the importance of proper regulation for cryptocurrencies. His remarks came shortly after a significant court decision on July 3, which was linked to a $120 million Ponzi scheme case in Illinois. The court recognized both BTC and ETH as commodities, a classification that supports the CFTC’s jurisdiction over these assets. The court also classified other digital assets like Olympus (OHM) and KlimaDAO (KLIMA) as commodities.
Rostin Behnam made a tweet on X FKA, after making a remark on CFTC.gov. Rostin says, “Today, I testified on digital commodity assets in front of the Senate Agriculture Committee. Read my remarks at CFTC.gov”
“In its decision, the court re-affirmed that both BTC and Ether are commodities under the Commodity Exchange Act,” Behnam highlighted during his speech.
He also referenced a 2022 report by the Financial Stability Oversight Council, which pointed out the regulatory gaps in the spot market for BTC and ETH that are not securities. The council urged the CFTC to expand its oversight to fill these gaps and protect the financial markets and investors from potential risks.
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Despite the growing public interest in digital currencies, Behnam warned that the lack of action from other regulatory bodies in the US could lead to increased risks to the financial system. “Our current trajectory is not sustainable. Federal legislation is urgently needed to create a pathway for a regulatory framework that will protect American investors and possibly the financial system from future risk,” he explained.
BTC and ETH Regulation: CFTC’s Legislative Priorities
According to news sources, the CFTC chair outlined several legislative priorities that would enable his agency to effectively regulate BTC and ETH. These priorities include the ability for the CFTC to develop rules that are tailored to the unique risks posed by cryptocurrencies. Behnam also proposed a permanent “fee-for-service model” to fund the regulation of these assets and stressed the need for comprehensive disclosure requirements for registrants in the crypto sector. Additionally, he advocated for enhanced Know Your Customer (KYC) and Anti-Money Laundering (AML) measures under the CFTC’s jurisdiction.
Moreover, Behnam called for a disciplined and balanced framework to determine whether tokens should be classified as commodities or securities, which is crucial for establishing clear regulatory boundaries. He also proposed the introduction of extensive educational and outreach programs to inform US citizens about crypto assets.
“The SEC and CFTC have a longstanding partnership that facilitates strong, robust regulation of securities and derivatives markets,” Behnam remarked. He expressed confidence in the continued cooperation between the two agencies to ensure a reliable, fair, and efficient market for the trading of BTC and ETH on regulated exchanges.
In summary, as the digital asset landscape continues to evolve, the call for clearer and more comprehensive regulatory frameworks grows louder. With influential entities like the CFTC pushing for more defined oversight, the future of cryptocurrency regulation in the United States seems poised for significant changes, aiming to protect investors while fostering an environment of innovation and security.
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