Regulation
70-80% of cryptocurrencies are not securities
CFTC Chairman Rostin Behnam has called for more funding and regulatory authority to oversee cryptocurrency spot markets as lawmakers move closer to comprehensive legislation.
Speaking at a Senate Agriculture Committee hearing on digital commodities oversight, Behnam said his agency is well-positioned to serve as the primary cryptocurrency watchdog.
Citing an Illinois court verdict that classified Bitcoin (BTC) and Ethereum (ETH) as digital assets, Behnam said the CFTC has the “expertise and capacity” to lead a regulatory regime. Behman told attendees that the commission needs additional tools and resources to achieve that goal.
“We have heard repeatedly that the CFTC and the SEC do not have the resources and tools necessary to conduct oversight in this enormous market,” said Senator Cory Booker. observed while calling for clarification of U.S. policies on cryptocurrencies and for the CFTC to be given additional powers.
Increase efforts for a regulatory framework
Policy makers are intensifying efforts to create a regulatory framework for cryptocurrencies amid a turf war between the CFTC and the Securities and Exchange Commission (SEC) over which agency should oversee the nascent industry.
A significant point of contention is operational capacity, with the CFTC employing about 700 workers compared to the SEC’s 4,500. Despite this disparity, over 50% of CFTC busts have involved crypto or digital asset fraud.
“It’s a staggering statistic for an agency that oversees a trillion-dollar market to allocate half of its resources to a market it doesn’t regulate or receive any funds for. It puts both markets at risk and reveals that there is so much fraud in the cryptocurrency space,” Behnam said.
The CFTC chairman expressed confidence in the agency’s ability to regulate cryptocurrency markets, but stressed the need for a new regime with clear rules defining commodities and securities.
That said, Behman believes that 70-80% of cryptocurrencies are not securities. Author: Gary GenslerSEC chairman, has often taken a contrary view, saying that existing federal laws cover most cryptocurrencies. Gensler essentially classifies the lion’s share of the industry under securities rules, though the regulator has refrained from saying so outright.
Bill to Assign Cryptocurrency Oversight to CFTC
Committee Chair Senator Debbie Stabenow briefed her fellow policymakers on a bill that would give the CFTC formal regulatory oversight of cryptocurrencies.
According to Senator Stabenow, the bill focuses primarily on centralized platforms like cryptocurrency exchanges rather than DeFi. It would implement capital reserve and cybersecurity compliance by digital asset service providers.
Stabenow’s policies would also grant the CFTC recurring funding and constitutional authority to oversee digital commodity markets, including cryptocurrency spot markets. Although Senator Stabenow is expected to resign in January 2025, the lawmaker is pushing the terms of the bill through Congress and said committee members should receive language packets by Friday.