Commodities Futures Trading Commission (CFTC) Chairman Rostin Behnam believes that most cryptocurrencies are commodities under existing laws, which need to be updated to account for technological advances.
Behnam made the statement during an interview on CNBC’s Squawk Box on Dec. 12. The CFTC chair said there is an urgent need for more comprehensive regulatory frameworks as crypto is here to stay.
Behnam’s comments come amid growing concerns about the lack of precise regulation in the digital asset space. He stressed that while cryptocurrencies have established a permanent presence in the market, regulatory bodies and Congress must work together to close existing gaps in legislation.
Turf War
According to Behnam, one of the critical challenges in regulating digital assets is the ongoing “turf war” between various regulatory bodies — primarily the SEC and the CFTC- over who gets to regulate the burgeoning sector. This conflict has hindered progress in establishing clear guidelines for the governance of digital currencies.
Benham said that Congress needs to step in and play a decisive role in legitimizing and integrating cryptocurrency technology into the existing financial system.
Behnam emphasized that the current regulatory framework is insufficient for digital assets’ novel and evolving nature. He called on Congress to address this gap, noting the importance of adapting decades-old laws to fit new technological advancements.
Behnam’s call to action reflects a growing consensus among regulators about the need for updated laws that can effectively govern the burgeoning cryptocurrency market.
Main concerns
A significant concern for Behnam is the use of cryptocurrencies in illegal activities, including terrorist financing. He pointed out that Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations are crucial in combating these issues.
Behnam also touched on the specific challenges posed by stablecoins and the overall structure of the cryptocurrency market. He indicated that while there is considerable focus on AML and KYC regulations, equal attention must be given to the stability and integrity of the market.
This includes ensuring customer protection and preventing market manipulation.
Behnam’s remarks shed light on the complexities of regulating the dynamic and rapidly evolving cryptocurrency market. His call for more explicit regulation and Congressional action underscores the pressing need for a coordinated approach to govern this new financial frontier.
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