The head of the U.S. Commodity Futures Trading Commission (CFTC) is calling for regulating many digital assets as commodities.
CFTC chair Rostin Behnam is supporting the proposed U.S. Senate bill 4760, the Digital Commodities Consumer Protection Act of 2022 (DCCPA), to give his agency oversight authority to regulate cryptocurrency assets the same way they do other derivatives markets.
During a hearing on the bill before the U.S. Senate Committee on Agriculture, Behnam says his agency’s oversight in this financial digital space is a logical extension of what they already do.
“As I have publicly stated several times, including to this committee, and as has been recognized by federal courts, many digital assets constitute commodities. As recognized by the DCCPA, the CFTC’s expertise and experience make it the right regulator for the digital asset commodity market.”
Behnam urges swift action during the current volatile market conditions when consumers are likely to suffer more financial investment losses.
“Many participants in these markets may perceive themselves to be interacting with exchanges and intermediaries structured and regulated like those in other financial markets. The reality is quite different. The lack of a comprehensive regulatory regime means that traditional market-based disclosures and bankruptcy protections are frequently absent, and disruptions involving trade settlement, conflicts of interest, data reporting, and cybersecurity resulting in unprotected customer losses are more likely.”
Behnam says that under the bill CFTC oversight would mean more transparency about who people are doing business with and the risks associated with transactions.
“Critically, all digital commodity platforms must maintain adequate financial, operational, and managerial resources, segregate customer funds, and comply with Commission requirements for the treatment of customer assets.”
Head of another financial regulatory agency, U.S. Securities and Exchange Commission (SEC) chairman Gary Gensler, recently testified before US Congress that a large portion of the approximate 10,000 cryptocurrency tokens are securities and that securities laws must apply to their transactions. Gensler wants these cryptocurrency firms to register their tokens with the SEC.
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