After years of regulatory uncertainty and a slew of high-profile hacks, the Commodity Futures Trading Commission (CFTC) is finally taking steps to ensure the safety of crypto investors. At a recent speech to the American Bar Association, CFTC Chair Rostin Behnam laid out a plan for what he called “landmark crypto enforcement” for 2023.
CFTC’s Head Endorses Enforcement Of Regulatory Measures
Behnam declared that during the 2022 financial year, the authority applied over $2 billion in reimbursements, disgorgements, and civil monetary penalties. Regarding cryptocurrency, the CFTC presently has authority over other markets in the U.S., encompassing Bitcoin futures.
However, its companion agency, the SEC, has continually refused enrollments for a spot Bitcoin Exchange-Traded Fund (ETF), arguing that the ETF market is likely to be subject to manipulation. The chair maintained that “comprehensive” regulation was essential to protect customers and guard against the potential for failures, and have a far-reaching effect beyond national borders.
Behnam noted that action should be taken now to be prepared for any possibilities that may arise. “I am willing to offer my technical assistance to help in drafting the legislation,” he said.
Last August, U.S. Senators John Boozman, Debbie Stabenow, and John Thune proposed an act intending to bring crypto assets under the purview of the Commodity Futures Trading Commission, The Digital Commodity Exchange Act of 2022.
CFTC Is Sharply At Odds With Its Companion Agency
In contrast to Behnam’s two-pronged strategy, the SEC has mainly taken an enforcement-focused approach concerning the cryptocurrency market. Following the failure of FTX, influential figures such as MicroStrategy’s Michael Saylor and Coinbase’s Brian Armstrong have demanded more definite regulatory guidelines.
Nevertheless, SEC chair Gary Gensler has remained firm in his belief that existing security laws are enough and that there is no need for new regulations.
Senators Gather To Debate Crypto Downturn Following Congress’ Inauguration
Behnam’s appearance as a solitary witness at the Senate Agricultural and Banking Committee’s December 1, 2022, hearing on the FTX collapse signaled a call for Congress to expand the CFTC’s authority.
Following the 2023 Congressional session on January 3, 2023, numerous crypto bills were presented to legislators. The CFTC’s commitment to robust enforcement is a significant positive for the industry.
By taking a hard line against bad actors, the agency sends a clear message that it will not tolerate misconduct. Thus, this move should lead to more investor confidence and excellent market stability in the years ahead.
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