Benham asserted that the majority of cryptos should be classified as commodities | Credit: Getty Images
Key Takeaways
- Rostin Benham says cryptocurrencies need updated regulations to integrate seamlessly into the financial system.
- The CFTC Chair claims Congress must act to resolve the regulatory turf war between the SEC and CFTC.
- AML/KYC are crucial, but regulations must also focus on market stability and customer protection.
In the fiscal year 2023, the United States Commodity Futures Trading Commission (CFTC), initiated 47 actions against the crypto industry. This number represents only a small fraction of the total trading activities overseen by the regulatory body, which has jurisdiction over fraud and manipulation in the crypto markets,
Recently, its Chairman, Rostin Behnam, highlighted the need for more comprehensive regulatory frameworks.
Behnam Calls for Updated Regulations, Collab, and End to “Turf War”
Benham asserted that the majority of cryptocurrencies should be classified as commodities within the current legal framework, emphasizing the necessity to update regulations to accommodate technological advancements.
His remarks address growing concerns about the lack of precise regulation in the digital asset space. This underscores the importance of collaborative efforts between regulatory bodies and Congress to address existing legislative gaps.
Behnam identified a significant obstacle in the regulation of digital assets. He pointed to the ongoing “turf war” between different regulatory bodies, notably the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC).
This conflict revolves around working out which regulatory entity should oversee the rapidly growing sector. The resulting discord has impeded the development of clear, comprehensive, guidelines for the governance of digital currencies.
Congressional Action to Revamp Outdated Laws
Behnam said that Congress must take a proactive role in legitimizing and seamlessly integrating cryptocurrency technology into the established financial system. Stressing the inadequacy of the current regulatory framework, Behnam urged Congress to address this. He underscored the significance of adapting longstanding laws, crafted decades ago, to align with the evolving landscape of new technology.
His call for action resonates with a mounting consensus among regulators, highlighting the shared understanding of the need for updated laws capable of governing the rapidly expanding cryptocurrency market .
Calling for Balance Between AML/KYC and Market Stability
Behnam expressed concern over the illicit use of cryptocurrencies, particularly in financing terrorism. He highlighted the importance of Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations as essential tools in addressing this.
In addition to these regulatory measures, Behnam discussed the specific challenges presented by stablecoins and the broader structure of the cryptocurrency market. He emphasized the need for balanced attention, saying that while there was considerable focus on AML and KYC, equal importance should be placed on ensuring the stability and integrity of the overall market.
Behnam emphasized the necessity of safeguarding customer protection and preventing market manipulation within the crypto space. His remarks demonstrate the challenges associated with regulating the market. By calling for more explicit regulations and emphasizing the role of Congress, Behnam underscores the need for a coordinated and comprehensive approach towards crypto.
effectively govern this emerging financial frontier.
