CFTC Chair Calls for Crypto Regulation, Directly Opposing SEC Chair’s Stance “Rules of the Road are Clear”
Appearing as a keynote speaker on Monday, the Chair of the US Commodity Futures and Trading Commission (CFTC) doubled down on his stance that current cryptocurrency regulation is unsatisfactory. Rostin Benham was clear in his belief that the crypto market requires a transparent, regulatory framework that benefits both lawmakers and innovators within the nation. His comments come in direct contrast to the Securities and Exchange Commission Chair, Gary Gensler, who has repeatedly claimed that the current legislation for crypto is adequate.
The Securities and Exchange Commission in 2023
It has been a tumultuous year for crypto regulation in the United States. The Securities and Exchange Commission (SEC) has assumed the de facto role as lawmakers for the crypto industry and remained steadfast that the market’s rules are loud and clear. This has led them on a legal warpath, with the regulatory body suing Binance, Coinbase and Ripple Labs among other big-name crypto projects.
But opposing legislators, the CFTC, strongly disagreed with the SEC’s stance:
“There is a dearth of principles. Sound policy written out decades ago to serve an immediate need now presents as a non sequitur…What we are experiencing now is a trend toward an outgrowth of electronification and the promise of DeFi. Customer protection means something different now – an extension of the technological leaps of this last decade.”
Fraud in the Crypto Markets
It’s worth noting that Benham’s keynote speech was not necessarily pro-crypto. Rather, his focus was on improving and modernising current legislation to help protect customers from the fraud risks unique to the crypto market. Since 2015, Benham’s agency has dealt with 131 incidents – and 34% of these were related to “digital asset misconduct”. He believes his body has been hamstrung in resolving these issues due to outdated regulations.
Benham also contends that 70% of the crypto market should be considered commodities. Such a delineation would give his agency greater power over the regulatory framework and reduce the legal requirements for exchanges and new crypto projects releasing tokens. However, as it stands the SEC considers most cryptocurrencies to be “securities” which has caused much of the regulatory uncertainty experienced over the past 12 months.