Janice R. Andrews
The U.S. Commodity Futures Trading Commission (CFTC) chair, Rostin Behnam, has reaffirmed his position on Bitcoin and Ethereum, arguing that they should be categorised as commodities and fall under the purview of his organisation. During his July 9 hearing before the U.S. Senate Committee, he stated this claim, which was supported by a recent court decision.
Court Decision Upholds CFTC Position
Behnam brought up a July 3 court decision in Illinois that was significant and related to a $120 million Ponzi scam run by an Oregon individual. The Commodity Exchange Act classifies Olympus (OHM), KlimaDAO (KLIMA), Bitcoin, and Ethereum as commodities, according to the ruling made by the judge in this case. The CFTC’s long-standing view is supported by this verdict, which further bolsters its regulatory jurisdiction over these digital assets.
Filling in Regulatory Vapours
Behnam also referenced a 2022 report from the Financial Stability Oversight Council (FSOC) in his statement. The paper brought attention to a regulatory void that exists in the spot market for non-securities digital assets. According to Behnam, this disparity calls for the CFTC to play a bigger part in regulating digital commodities. Given the increased public interest in digital assets, he emphasised that the absence of decisive action by other U.S. agencies could heighten dangers to investors and financial systems.
Federal Law Is Needed Immediately
Behnam underlined how urgent it is for Congress to pass legislation at the federal level to create a thorough regulatory framework for digital assets. “In other words, we cannot continue on this course. In order to establish a regulatory structure that will shield American investors and maybe the financial system from future danger, federal legislation is desperately needed, he claimed. He issued a warning, saying that investors and the financial system would be at greater danger in the absence of such laws.
Digital Commodities Legislative Priorities
Behnam listed the following five major legislative initiatives that he thinks the CFTC should pursue in order to improve the regulation of digital commodities:
- Tailored Rules for Cryptocurrencies: Creating laws that take into account the particular dangers connected to cryptocurrencies.
- Permanent Funding Model: To sustain the CFTC’s regulatory efforts, a permanent “fee-for-service” funding model should be established.
- Comprehensive Disclosure: Making registrants give thorough explanations of their cryptocurrency holdings.
- Enhanced KYC and AML: To better monitor and reduce risks, the CFTC is strengthening its Know Your Customer (KYC) and Anti-Money Laundering (AML) capabilities.
Behnam’s evidence highlights the CFTC’s dedication to regulating Bitcoin and Ethereum as commodities and supports a strong regulatory framework that will protect investors and the financial system. The need for clear and comprehensive regulation is becoming more and more pressing as digital assets continue to gain popularity.
