Chairman of the Commodities Futures Trading Commission (CFTC), Rostin Behnam has called on Congress in the U.S. to take a more critical position in providing guidance to federal agencies on the way forward for crypto regulation.
Behman made the call on Wednesday at DC Fintech Week. He said that although the CFTC and the securities and exchange commission (SEC) have been working together for a long, the case of digital assets is unique.
This is coming as a result of discrepancies in the positions of the two agencies on crypto assets in the past. For example while SEC’s Gary Gensler has since insisted that only Bitcoin is a commodity, Behman has always said that Ethereum is also a commodity.
These differences in opinion have appeared under different circumstances as far as crypto regulation is concerned, hence the need for regulatory clarity with one direction.
“The one area that’s missing and I think makes difficult the idea or notion that we could just get together and you know, quote unquote, figure this out, is this one pocket, this hole, this vacuum in this larger Venn diagram — and that’s where we need Congress to really give us a steer on whether we should be consistent… on a Howey Test model, or is there a new model or framework that we should be thinking about digital tokens through a different lens,” Behnam said.
Crypto has Great Potential
The U.S has cracked down on crypto heavily this year, particularly through the SEC. Top players in the industry including Binance and Coinbase have been in court since June on allegations of securities laws violations which both companies have denied.
The confusion leading to this lies in the fact that there’s no clear regulatory guidance for the industry, something Gensler has refused to admit. All the same, Behman sees “great potential” in the crypto industry and thinks that congress needs to step in considering its growth.
“I think this area is an area of great potential,” Behnam said. “I mean I don’t think anyone can deny that, again being as objective as possible as a regulator and not a market participant, but there’s obviously been a lot of growth,” he added.
Meanwhile, congress is working on legislation to provide regulation and has been playing guidance roles in some cases to give direction recently.
The case of Grayscale against the SEC which the court ruled against the SEC has been supported by the congress which directed the agency to reconsider Grayscale’s application to be converted into a Bitcoin spot ETF.
Both Republican and Democrat lawmakers seem to agree on the ruling and agree that there was no good reason to turn down the request.
CFTC Working with What’s AVailable
Despite the lack of regulatory clarity that plagues the crypto industry, the CFTC is still working with what it has to its best ability.
The agency released its enforcement report on Tuesday, which showed many cases it has handled so far. The report shows that about 49% of all handled cases involve crypto assets. Commenting on the report, he said:
“In so many respects, that’s a great statistic, but in many respects, it’s an alarming statistic because for an agency that does not have authority over this cash digital asset market — 49 percent of our docket is allocated or committed to digital assets,” Behnam said.