Mercy Mutanya is a Tech enthusiast, Digital Marketer, Writer and IT Business Management Student. She enjoys reading, writing, doing crosswords and binge-watching her favourite TV series.
The agency currently oversees derivative markets such as crypto futures while spot markets are regulated at the state level.
Commodity Futures Trading Commission (CFTC) Chairperson Rostin Behnam has called on Congress to allow his agency to take over the responsibility of regulating crypto spot markets. Speaking to the Senate Agriculture Committee on Wednesday, Behnam expressed confidence in the CFTC’s ability to do so an opinion he first expressed in October last year.
“We are past the stage where digital assets and decentralized financial technologies are a research project, sandboxing what may come in the future. The issues are at the front and center of our thinking at the Commission in addition to our traditional regulatory, oversight and enforcement responsibilities. The CFTC is well situated to play an increasingly central role in overseeing the cash digital asset commodity market,” Behnam said.
The CFTC would need $100 million added to their current $300 million annual budget to effectively carry this out. Part of the funds would go towards equipping staff at the agency with the tools and knowledge needed to monitor and counter cyberattacks specific to the cryptocurrency industry. In response to Sen. Amy Klobuchar of Minnesota, the agency chief suggested that he was not opposed to the idea of creating his own team. Benham also revealed that a significant part of the enforcement action taken by the agency depends on intel from tips and whistleblowers and as such a portion of the budget would be dedicated to enforcement.
Jurisdictional Issues with the SEC
The agency currently oversees derivative markets such as crypto futures while spot markets are regulated at the state level. Stocks, funds and digital tokens that qualify as securities are regulated by the Securities and Exchange Commission (SEC). If Congress were to act on Behnam’s plea, such jurisdictional issues would need to be addressed. The debate on whether digital assets should be viewed as commodities or securities has been going on for a while. There have been calls by some crypto firms to have the industry regulated by the CFTC. Major exchange Coinbase has in the past, however, called for a new regulator, dedicated to the regulation of digital assets. As such, Behnam cited the need for “clear, distinct lines” to be drawn between digital assets that are considered securities and those that are not.
Behnam also presented Congress with the agency’s response to a series of concerns previously raised by the Senate Agriculture Committee on crypto regulation.
“In my opinion, there are important principles missing from the current regulatory framework applicable to digital asset markets that we see in other federally regulated markets, particularly ones that primarily cater to retail investors. A federal regulatory regime may ensure that certain safeguards are in place to address the risks to individual investors, market integrity and systemic stability. Those safeguards could include pre-trade and post-trade transparency and uniform standards around settlement, data reporting, cyber security and leverage,” reads an excerpt from the document.
You can read more crypto news on Coinspeaker.