According to The Block, Rostin Behnam, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), once again urged legislators to take action and grant new powers to the agency in the industry, as cryptocurrency-related issues are consuming CFTC’s resources.
During his testimony before the House Agriculture Committee on Wednesday (6th), Behnam pointed out that in the fiscal year 2023, over 49% of CFTC’s enforcement actions 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 only the enforcement department’s resources that are being consumed but also “we need experts from different departments to jointly construct cases.”
Behnam also highlighted the recent growth in cryptocurrency values and the optimism of retail investors, calling it a “warning event” and emphasizing the necessity of a regulatory framework. He stated, “This is not about legitimizing the technology, this is about protecting 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 responsibility to the CFTC and guide regulators in creating a clear path for the transition of digital assets from securities to commodities. However, due to a lack of necessary support, the likelihood of the bill being passed and submitted to the U.S. President’s desk is slim.
Several legislators inquired during Wednesday’s hearing about the possibility of CFTC swiftly implementing its regulatory framework if the bill were to advance. Behnam stated that the agency would need a year’s time and also added that the recent record-high Bitcoin prices highlight the need for action.
Regarding whether Ethereum is classified as a security or a commodity, Behnam was also asked. He stated that Ethereum is considered a commodity, and the Securities and Exchange Commission (SEC) regulators have not provided a clear stance on this matter.
Prior to this, 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. Republican Congressman Zach Nunn of Iowa expressed concerns on Wednesday, saying, “I’m worried 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 had any communication with Prometheum, but he emphasized that the decision to provide custody for Ethereum is up to the company itself and not the SEC’s decision. Behnam said,
