The Commodity Futures Trading Commission (CFTC) has shared with Congress its plans to regulate the crypto market with “full oversight capabilities” if the Digital Consumer Protection Bill becomes law. The regulator claims to have the necessary experience and expertise and believes that “many digital assets constitute commodities”. Meanwhile, SEC Chairman Gary Gensler has insisted that the vast majority of crypto tokens are securities.
CFTC Chairman Testimony on Crypto Regulation and the Digital Products Consumer Protection Act
Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam explained how his agency would regulate the crypto market during a legislative hearing on Thursday before the US Senate Committee on Agriculture, Nutrition and Forestry.
The purpose of the hearing was to review the Digital Products Consumer Protection Act (DCCPA) which seeks to give the CFTC “exclusive jurisdiction over the spot market for digital products.” The bipartisan bill was introduced in the US Senate in August by Senators Debbie Stabenow (D-MI), John Boozman (R-AR), Cory Booker (D-NJ) and John Thune (R-SD).
Behnam told lawmakers:
Many digital assets are commodities… The CFTC’s expertise and experience make it the right regulator for the digital asset commodity market.
He explained that his agency “facilitates client protection through its principles-based market surveillance and disclosure regime aimed at ensuring transparency, integrity and security of transactions.”
Behnam then clarified that since 2014, the CFTC has brought nearly 60 cases related to digital assets, including a recent case involving a $1.7 billion fraudulent scheme.
“With a lack of complete visibility into the digital asset market, the agency’s enforcement program has had to rely primarily on advice and complaints from the public to identify fraud and manipulation,” the president described. of the CFTC, adding:
While we are engaged in a comprehensive agency-wide effort to monitor these markets and their participants with the tools currently available to us, the DCCPA will allow us to apply our comprehensive monitoring capabilities without restriction.
President Behnam concluded that “with the additional resources contemplated by the DCCPA funding mechanism and the clear mandates for customer education, outreach, and information gathering to ensure that our efforts reach all demographics in the investment community,… the CFTC can act quickly in implementing this new regime.
Meanwhile, two other bills have been introduced in Congress this year to make the CFTC the primary regulator of the crypto spot markets. The “Responsible Financial Innovation Act” was introduced in June by US Senators Cynthia Lummis (R-WY) and Kristen Gillibrand (D-NY). The other bill was the “Digital Commodity Exchange Act of 2022”, introduced in April by Representatives Ro Khanna (D-CA), Glenn “GT” Thompson (R-PA), Tom Emmer (R-MN) and Darren Soto. (D-FL).
Meanwhile, U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has repeatedly stated that the vast majority of crypto tokens are securities and should fall under the jurisdiction of his agency. However, he acknowledged that bitcoin is a commodity. Last week, US Senator Pat Toomey said Congress should step in with crypto guidance and that the SEC should provide much more clarity on how it regulates the crypto industry.
Do you think the CFTC should be the main regulator of the crypto market? Let us know in the comments section below.
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