U.S. Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam emphasized the urgent need for a comprehensive regulatory framework for the cryptocurrency industry during the Futures Industry Association Expo 2023 on Oct. 2. This contradicts the stance of U.S. Securities and Exchange Commission (SEC) Chair Gary Gensler, who believes that existing securities laws are sufficient to regulate the industry.
During the event, Behnam expressed his belief that many digital assets should be classified as commodities. He called on Congress to establish guidelines for commodity tokens and expand the CFTC's authority over them. Behnam has previously highlighted the necessity for updated policy frameworks to appropriately regulate the digital asset industry.
In August, Behnam stated in a podcast interview that the crypto industry participants are seeking regulatory clarity. He acknowledged that implementing clearer regulations would likely attract more institutional participants to the industry. Behnam emphasized that institutional demand is likely to increase if there is a clear regulatory framework.
On the other hand, SEC Chair Gensler has repeatedly asserted that existing regulations are sufficient for the crypto industry. He has maintained that "most crypto tokens" are securities and that the SEC will continue to apply existing laws to the digital asset industry.
The SEC has taken enforcement actions against numerous crypto companies this year for alleged registration violations. This includes prominent names such as Binance, Coinbase, Linus Financial, Impact Theory, Celsius, Coinme, Bittrex, Beaxy, Kraken, Nexo Capital, Genesis, and Gemini.
Lawmakers, including U.S. Senator Cynthia Lummis, have criticized the SEC's approach to the crypto industry, calling it "regulation by enforcement." They have warned that the lack of comprehensive regulations for the industry will result in innovation moving offshore. Sen. Lummis has emphasized the need for a robust legal framework that exchanges can comply with to ensure consumer protection.
Last summer, Sen. Lummis and Sen. Kirsten Gillibrand introduced the Responsible Financial Innovation Act, which aims to establish a comprehensive regulatory framework for digital assets. The bill includes standards to determine the regulatory classification of digital assets as securities or commodities. It also grants regulatory authority over the digital asset spot market to the CFTC.
