CFTC Prepares to Step up Oversight of Crypto Market — Says Many Digital Assets Are Commodities

The Commodity Futures Trading Commission has shared its plans with Congress to regulate the cryptocurrency market with "full supervision capabilities" if the Digital Commodities Consumer Protection Act is passed. According to the regulator, they have the necessary experience and expertise. They believe that many digital assets are commodities. However, Gary Gensler, the Chairman of the SEC has maintained that crypto tokens make up the majority of securities.

Chairman of the CFTC Testimony on Crypto Regulations and the Digital Commodities Consumer Protection Act

Rostin Behnam, chairman of the Commodity Futures Trading Commission, spoke out about how his agency would regulate crypto markets in a hearing before the U.S. Senate Committee on Agriculture, Nutrition and Forestry on Thursday.

The hearing was held to examine the Digital Commodities Consumer Protection Act. (DCCPA), which seeks to give the CFTC exclusive jurisdiction over digital commodities spot markets. It was introduced by Senators Debbie Stabenow, John Boozman, Cory Booker (D.NJ), John Thune (R.SD).

Behnam stated to lawmakers:

Many digital assets are commodities. The CFTC's experience and expertise make it the best regulator for the digital commodity market.

He stated that the agency facilitates customer protections through its principles based market oversight, disclosure regime, and transparency regime, which aims to ensure transparency, integrity and security of transactions.

Behnam went on to say that the CFTC had brought nearly 60 digital asset enforcement cases since 2014. This included a case involving a $1.7 million fraudulent bitcoin scheme.

"With a lack in full visibility into digital commodity asset markets, the agency's enforcement program had to rely primarily on tips from the public to detect fraud and manipulation," said the CFTC chairman.

We are currently engaged in a broad effort across the agency, to police these markets as well as their participants using the tools we have at our disposal. However, the DCCPA will enable us to use all of our oversight capabilities without limitation.

Chairman Behnam concluded, "With the additional resources contemplated in the DCCPA funding mechanism and the clear mandates to customer education, outreach and information gathering in order that our efforts reach all the investing community,… The CFTC can quickly move in implementing this new regime."

Two other bills were introduced to Congress this year, making the CFTC primary regulator of crypto spot markets. In June, the U.S. introduced the "Responsible Financial Innovation Act". U.S. Senators Cynthia Lummis, R-WY, and Kristen Gillibrand, D-NY. Another bill was the "Digital Commodity Exchange Act of 2022", introduced by Reps. Ro Khanna, Glenn Thompson (R–PA), Tom Emmer and Darren Soto.

Gary Gensler (chairman of the U.S Securities and Exchange Commission) has repeatedly stated that most crypto tokens are securities and should be under his agency's jurisdiction. He acknowledged, however that bitcoin is a commodity. U.S. Senator Pat Toomey stated that Congress should act with crypto guidance, and that the SEC should give more information on how it regulates crypto.

Are you a believer that the CFTC should be the primary regulator for the crypto market? Comment below to let us know your thoughts.

By: Kevin Helms
Title: CFTC Prepares to Step up Oversight of Crypto Market — Says Many Digital Assets Are Commodities
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Published Date: Mon, 19 Sep 2022 00:30:24 +0000

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