According to a report by The Block, Rostin Behnam, the Chairman of the U.S. Commodity Futures Trading Commission (CFTC), has once again urged legislators to take action and grant the agency new powers over the industry, as cryptocurrency-related issues are consuming CFTC resources.
During his testimony before the House Agriculture Committee on Wednesday, Behnam pointed out that over 49% of CFTC’s enforcement actions in the 2023 fiscal year were related to digital assets, and the market is still growing. He stated that a market they do not directly regulate accounts for half of their enforcement cases, and it is not just the enforcement department’s resources that are being consumed, “we need experts from different departments to collaborate on cases”.
Behnam also highlighted the recent growth in cryptocurrency values and the optimism of retail investors, referring to it as a “warning event” and emphasizing the need for a regulatory framework to protect the American public and investors.
In July of last year, the House Agriculture Committee and the House Financial Services Committee jointly pushed for the passage of the “21st Century Financial Innovation and Technology Act”, which would give more responsibilities to the CFTC and provide a clear path for the transition of digital assets from securities to commodities. However, due to lack of necessary support, the likelihood of the bill being passed and submitted to the U.S. President’s desk is minimal.
Several legislators inquired during the hearing on Wednesday if the CFTC would be able to swiftly implement its regulatory framework if the bill were to move forward. Behnam stated that the agency would need a year’s time, while also adding that the recent record-high Bitcoin prices highlight the necessity of taking action.
Regarding the question of whether Ethereum (ETH) is a security or a commodity, Behnam was also asked. He stated that Ethereum is a commodity, and the regulators at the Securities and Exchange Commission (SEC) have not provided a clear statement on this.
Prior to this, the cryptocurrency platform Prometheum received a special-purpose broker-dealer license from the SEC last year and announced last month that its subsidiary, Prometheum Capital LLC, will provide custody services for Ethereum. Iowa Republican Congressman Zach Nunn expressed concerns on Wednesday, saying, “I am concerned that the SEC will take this opportunity to bypass Congress or even the CFTC and further confuse participants who have already entered this field.”
Behnam stated that he has not communicated with Prometheum, but he mentioned that the decision to custody Ethereum is the company’s independent decision and not that of the SEC. Behnam said,
