By
Temitope Olatunji
April 26th, 2024
Even if Congress passes the FIT Act, it will take the CFTC no less than a year to develop a comprehensive regulatory framework.
In a bid to address the growing concerns surrounding the regulation of cryptocurrencies, the chair of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, has urged Congress to issue comprehensive legislation that will guide the crypto market.
Behnam’s impassioned plea comes amidst escalating volatility and increasing adoption of digital assets, with cryptocurrencies like Bitcoin and Ethereum reaching record highs in recent months. The lack of clear regulatory frameworks has raised significant challenges for both investors and industry players, leaving them vulnerable to market manipulation, fraud, and illicit activities.
Speaking before the House Agriculture Committee on March 6, Behnam emphasized the urgent need for Congress to provide regulatory clarity, asserting that it was crucial for protecting investors and ensuring the integrity of financial markets. His testimony also highlighted the CFTC’s limited authority in overseeing the crypto space and stressed the importance of a unified approach in addressing the unique complexities posed by digital assets.
Unregulated Crypto Equals Risk, CFTC Warns Congress
During the hearing, Behnam reminded the house that the notion that crypto is going away is a false narrative. So, it will be in the best interest of everyone that all hands be on deck to make investor protection an immediate priority, he added.
He said this, noting that global regulators and lawmakers have been approaching the digital assets market like something that will lose relevance over time. However, he said that the last decade has proven otherwise, with demand for digital assets skyrocketing during that period.
To this end, Behnam has urged Congress to pass the Financial Innovation and Technology Act for the 21st Century (FIT Act). The FIT Act aims to clarify the regulatory responsibilities regarding digital assets. More importantly, as it relates to the questions around the proper classification of digital currencies. That is, what should or not be classified as commodities or securities.
According to Behnam, even if Congress passes the FIT Act, it will take the CFTC no less than a year to develop a comprehensive regulatory framework for digital assets.
The CFTC chair’s clamour comes on the heels of heightened regulatory scrutiny worldwide. More so, regulators in several countries are also beginning to step up efforts to establish clear guidelines for the crypto industry.