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CFTC Boss Says Crypto Here to Stay, Demands Regulation for “False Narrative” Market

Last Updated March 7, 2024 8:35 AM
Teuta Franjkovic
Last Updated March 7, 2024 8:35 AM
By Teuta Franjkovic
Verified by Peter Henn

Key Takeaways

  • CFTC Chair urges Congress to pass clear regulations for the crypto industry.
  • Behnam refutes claims of crypto’s decline, citing growth and urging balanced regulation to address industry challenges.
  • He urges swift action on the FIT Act, claiming the CFTC can develop a crypto framework within a year if it passes.

CFTC Chair Rostin Behnam told  Congress of the critical need for legislation that would offer clear regulatory guidance for the cryptocurrency sector.

Behnam’s remarks came as he testified  before the House Agriculture Committee on March 6. The main item on the agenda was, however, the CFTC’s budget request  for fiscal year 2025.

Addressing Digital Assets’ Growth and Misconceptions

Benham highlighted  that, in the year to October 2023, over 49% of the CFTC’s enforcement actions were connected to digital assets.

This is notable, because “no federal agency has direct regulatory oversight” over the cryptocurrency industry.

He said :

“The notion that crypto is going away is a false narrative.”

During the congressional hearing , Behnam discussed Bitcoin (BTC) and Ethereum (ETH).

He pointed out a misconception among regulators and legislators that the digital asset market’s significance could wane.

Contrary to this, the past decade has shown robust growth for these assets’ demand, suggesting increasing relevance.

Behnam Urges Congress for Swift Action on Digital Asset Regulation

Behnam emphasized the importance of swift legislative action to create a stable and clear regulatory landscape for digital assets. He said investor protection was a critical government responsibility amid growing interest in these assets since the year’s beginning.

He estimated that, with the passage of the Financial Innovation and Technology Act for the 21st Century (FIT Act), the CFTC could develop a comprehensive regulatory framework for digital assets in around 12 months.

The FIT Act, which successfully passed through the House Agriculture and Financial Services Committees but has not yet gone to a floor vote, delineates regulatory duties relating to digital assets.

Clarifying BTC and ETH as Commodities in Congressional Testimony

In his testimony, Behnam tackled questions from committee members about whether digital currencies should be classified as commodities or securities. This distinction significantly affects their regulatory oversight. Responding to Representative John Duarte, Behnam said digital assets typically fell into the commodities category if they don’t fulfill the criteria for being considered securities. This, in turn, highlighted the complexity of regulating such assets.

Specifically, Behnam pointed out that Bitcoin and Ethereum are not classified as securities. This places them under the commodities classification, despite their stark differences from traditional physical commodities.

Behnam also informed Duarte about significant interest in Bitcoin from both retail and institutional investors. He acknowledged the regulatory challenge of fitting cryptocurrencies into existing frameworks and stressed the necessity of approaching the crypto industry as a distinct entity.

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