The Commodity Futures Trading Commission (CFTC) has shared with Congress its plans to regulate the crypto market with “full oversight capabilities” if the proposed Digital Commodities Consumer Protection Act becomes law. The regulator claims to have the right experience and expertise and believes that “Many digital assets constitute commodities.” Meanwhile, Gary Gensler (SEC Chairman) insists that crypto tokens do not constitute securities.
CFTC Chairman’s Testimony on Crypto Regulation and the Digital Commodities Consumer Protection Act
Rostin Begnam, chairman of Commodity Futures Trading Commission, spoke out about how the agency will regulate crypto markets in a hearing before the U.S. Senate Committee on Agriculture, Nutrition, and Forestry on Thursday.
The purpose of the hearing was to review the Digital Commodities Consumer Protection Act (DCCPA) which seeks to empower the CFTC “with exclusive jurisdiction over the digital commodities spot market.” The bipartisan bill was introduced in the U.S. Senate in August by Senators Debbie Stabenow (D-MI), John Boozman (R-AR), Cory Booker (D-NJ), and John Thune (R-SD).
Behnam said to legislators:
Many digital assets constitute commodities … The CFTC’s expertise and experience make it the right regulator for the digital asset commodity market.
He explained that his agency “facilitates customer protections through its principles-based market oversight and disclosure regime aimed at ensuring transparency, integrity, and security of transactions.”
Behnam explained that, since 2014, almost 60 cases related to digital assets enforcement have been brought by the CFTC, with one of these being a matter involving a $1.7 Billion fraudulent Bitcoin scheme.
“With a lack of full visibility into the digital commodity asset market, the agency’s enforcement program has had to lean primarily on tips and complaints from the public to identify fraud and manipulation,” the CFTC chairman described, adding:
We are currently engaged in an extensive effort within the agency to monitor these markets and the participants using the tools we have at our disposal, but the DCCPA will enable us to use all of our oversight abilities without limitation.
Chairman Behnam concluded that “with the additional resources contemplated by the funding mechanism in the DCCPA and the clear mandates for customer education, outreach, and information gathering to ensure that our efforts reach all demographics of the investing community, … the CFTC can move swiftly in effectuating this new regime.”
In the meantime, Congress has introduced two additional bills to designate the CFTC as the primary regulator for crypto spot market. The “Responsible Financial Innovation Act” was introduced in June by U.S. The “Responsible Finacial Innovation Act” was introduced by the U.S. senators Cynthia Lummis and Kristen Gillibrand (D.NY). The other bill was the “Digital Commodity Exchange Act of 2022,” introduced in April by Reps. Ro Khanna (D-CA), Glenn “GT” Thompson (R-PA), Tom Emmer (R-MN), and Darren Soto (D-FL).
Gary Gensler (chairman of U.S. Securities and Exchange Commission) has repeatedly stated that most crypto tokens should be considered securities and fall within the agency’s purview. But, Gensler acknowledged bitcoin as a commodity. U.S. U.S. Senator Pat Toomey stated last week that Congress should act with crypto guidance, and that the SEC needs to provide more information on its regulation of the crypto sector.
Are you a believer that the CFTC should act as the main regulator for the cryptocurrency market? Comment below to let us know your thoughts.
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