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CFTC Chairman Calls on Congress to Take Action
Election Gambling
Rostin Behnam, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), recently urged Congress to take action on cryptocurrency regulation and election gambling. According to The Block, Rostin Behnam stated at the Securities Industry and Financial Markets Association (SIFMA) annual conference on Monday:
“There’s been a lot happening in terms of technology and disruption. Digital assets are obviously a primary consideration when it comes to regulating the spot market, but what impact will blockchain and tokenization have on the financial markets? These are areas that I personally hope Congress pays more attention to.”
Rostin Behnam has previously pushed for cryptocurrency legislation, but he stated that he does not expect Congress to accomplish anything this year due to the holidays and the need to pass a federal budget.
“I think when we look ahead to 2025, a new Congress and a new president, we might see some relevant legislation.”
There are currently several bills being discussed by lawmakers, including FIT21, which would give the CFTC more power and funding to regulate the cryptocurrency spot market and “digital commodities,” particularly Bitcoin. FIT21 passed the U.S. House of Representatives in May, but has not made much progress since then. Patrick McHenry, the Republican representative from North Carolina and Chairman of the House Financial Services Committee who is retiring in January, remains optimistic about the bill’s passage before the end of the year.
The CFTC has also been monitoring the dynamics of prediction markets, which allow users to bet on the outcome of future events, ranging from the total snowfall in New York City this month to the severity of an economic downturn that may occur this year.
The CFTC has consistently maintained that gambling contracts related to election events are illegal, and this kind of gambling puts the agency in an awkward position. Rostin Behnam stated on Monday:
“This is a classic area where I think Congress should be involved.”
Over the past year, the CFTC has been involved in a legal battle with prediction market platform Kalshi, with the agency stating that Kalshi cannot offer election contracts and adding that it “is not in the public interest.” Subsequently, Kalshi filed a lawsuit in November 2023. Last month, Judge Jia M. Cobb of the U.S. District Court for the District of Columbia ruled that the CFTC exceeded its statutory authority in attempting to block Kalshi from offering election contracts. The agency quickly appealed this ruling, but it was ultimately rejected by the federal appeals court on October 2.
However, the CFTC took new action last week, arguing in an appellate brief that the judge’s ruling was erroneous and requesting its overturning.
