Regulatory uncertainty is one of the biggest challenges for cryptocurrency investors and has yet to be resolved. Market makers, large corporations, banks, and more are shying away from crypto due to ongoing pressure from the SEC. However, the CFTC, the SEC’s rival agency in the crypto space, has a very different perspective.
Rostin Behnam, the Chairman of the Commodity Futures Trading Commission, stated in a podcast this week that something needs to be done to regulate crypto, and added that the “solution” could be Congress passing a law. Behnam said during a podcast hosted by Intercontinental Exchange on Monday, “The market seems to want some kind of regulatory framework.”
“If there is a clear regulatory framework, you can predict that institutional demand will likely increase. But for me, when I think about individual participation, I definitely consider our enforcement history over the past decade. And I think that is a pretty clear evidence that something needs to be done.”
Behnam also argues that regulation is the only way to combat fraud and manipulation in the crypto space.
Lawmakers have drafted and passed several bills to regulate crypto, one of which is being prepared to be voted on in Congress to give more power to the CFTC. This bill has passed through committees in the House of Representatives and is known as the “21st Century Securities Act.” House Republicans hope that this bill will resolve the jurisdictional conflict between the SEC and the CFTC.
SEC Chairman Gary Gensler has stated that legislation is unnecessary and that existing securities laws regulate crypto, noting that most cryptocurrencies are securities. Meanwhile, Behnam stated in his remarks on Monday that 70% of the market is commodity. While Gensler claims that less than 1% is commodity, Behnam disagrees. According to him, even if Gensler gave less than 1%, 70% of altcoins in the market should be classified as commodities and under the control of the CFTC.
Behnam said in a podcast with ICE Chief Communications Officer Josh King, “The solution is to pass legislation from Congress that will fill the void around commodity tokens.”
“Questions, hearings, and markers from members of Congress are encouraging me. One or two of them happened last week, and I think collectively it was recognized that if we don’t do something together, we will continue to experience these crises.”
Meanwhile, Coinbase has obtained permission from the CFTC to offer cryptocurrency futures products. It seems that just as altcoins that have been labeled as securities are declining today, altcoins that receive the commodity label in the future will rise at a similar pace.