Rostin Behnam, the chairman of the U.S. Commodity Futures Trading Commission (CFTC), has urged Congress to introduce comprehensive regulations for the cryptocurrency industry. This appeal was made during his recent testimony to the House Agriculture Committee.
In his testimony, Behnam highlighted the CFTC's priorities and emerging trends within its jurisdiction. "While our current regulatory agenda demonstrates significant agility within our jurisdictional space, we periodically bump up against the limits of what may be contemplated under existing law given the relatively rapid evolution of markets, market structure, and technology," said Behnam. He also pointed out that several policy issues have arisen that he believes would benefit from further Congressional discussion, particularly in relation to digital assets.
Behnam stated that the recent surge in participation in the digital asset market has tested the limits of the "existing regulatory framework." He stressed that comprehensive regulations are necessary to protect consumers and markets from fraudulent or illicit activity. According to him, clearer authority from Congress would enable the CFTC to do more to protect consumers and address misconduct. "The lack of legislation addressing the regulatory gap over the digital commodity asset spot market has not hindered the public's enthusiasm for digital assets, and I continue to believe Congress must act," Behnam declared.
Previously, Behnam had expressed his belief that most digital assets are commodities rather than securities. When questioned about a potential regulatory conflict over digital assets between the CFTC and U.S. Securities and Exchange Commission (SEC) on CNBC’s "Squawk Box," he suggested that deciding which regulator should have authority over crypto largely depends on what a token buyer receives with their purchase. According to legal precedent, "many of the tokens constitute commodities," he said.
In contrast, SEC Chair Gary Gensler believes most digital assets are securities, as reported by CoinDesk. During an address to the Practicing Law Institute, Gensler stated that "most crypto tokens" are securities and the SEC would continue to apply existing laws to the digital asset industry. "Nothing about the crypto markets is incompatible with the securities laws," Gensler said.
Behnam was appointed as a CFTC commissioner in 2017 and ascended to the position of chairman in 2022, according to the CFTC’s website. Before joining the CFTC, Behnam served as senior counsel to U.S. Sen. Debbie Stabenow (D-Mich.), advising on the implementation of the Consumer Protection Act and the Dodd-Frank Wall Street Reform. He holds a law degree from Syracuse University.
