New Tech Innovation Office Launched by US CFTC to Focus on Crypto Regulation

American lawyer and government official Rostin Behnam, on Monday, revealed a few regulatory changes in the United States Commodity Futures Trading Commission (CFTC) to enable a more nurturing and thorough approach to the advent and evolution of financial technology. The US CFTC is the primary authority to oversee the crypto regulations in the country along with the Securities Exchange Commission (SEC).

LabCFTC, which was upgraded as a full-fledged lab in 2019 to look after and study the blockchain as well as cryptocurrency tools, is all set to witness newer developments. LabCFTC’s body of work will be oriented towards technology innovation, hence the name change to Office of Technology Innovation (OTI). A director who’d work under Behnam’s supervision is expected to lead the new office of the agency’s Lab. While the employees of the lab will consist of experienced professionals, everyone working for the research wing will be allowed rotations to get an experience of the crypto space.

According to Behnam, who gave his views on the new developments at a Brookings Institute webinar, the agency is currently more focussed on aggressively and thoroughly creating a system to regulate markets with mechanisms already provided to them. Adding to this, he also mentioned the agency’s persistent effort to continuously target ways to utilize their present autonomy and cultivate necessary regulations that safeguard the markets.

Moreover, the Office of Public Affairs is all set to reorient with the Commission’s Office of Customer Education and Outreach to allow enhanced participation of newer retailers in the market. An increased status of retail competitors presents a differentiating line between the virtual assets market and alternative commodities.

Having said that, Behnam also mentioned the issue of “collective analysis paralysis” by the regulatory authorities, as the fintech firms are experiencing an exponential rise in the market. A normally cynical Behnam seemed to be more inviting about collaborating with the agency’s present heads, which apparently exhibit a diminished lens for market surveillance and oversight abilities.

Calling the world way ahead from the initial research days of crypto, Behnam also stated that the enormity of the market, as well as the susceptibility of the retail participants and investors, have urged the United States to make persistent leaps in regulatory grunt work. While he is all of the praise for the legislature in its efforts to make the crypto space function better, he also suggested that his organization was looking into more innovative ways to come up with crypto solutions.

In June this year, Sens. Cynthia Lummis and Kirsten Gillibrand proposed a bill that would allow CFTC to become a regulatory authority over cryptocurrency markets and eventually, build a solid policy infrastructure in the sector. Such proposals, like the Lummis-Gillibrand bill and Digital Commodity Exchange Act bestows more power and authority to the CFTC over crypto markets.