According to the Chair of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, the Commodity Futures Trading Commission is “ideally positioned” to address regulatory deficiencies in the cryptocurrency industry.
In prepared remarks for an American Bar Association event on February 3, Behnam said he still doesn’t like cryptocurrencies. He said that he thinks there is still a regulatory gap but that the CFTC is “well-placed to fill this gap” if Congress gives the agency the power it needs.
The leader of the Commodity Futures Trading Commission (CFTC) said that last year’s failures, bankruptcies, and crashes caused the cryptocurrency market to lose almost $2 trillion in value. According to him, this is a resounding demonstration that the industry requires comprehensive legislation.
“Customers need protection, and failures that cannot be predicted to be contained within any bounds need to be prevented, which is why regulation is important across the domestic and international financial markets.” Regardless of how many or how few of these events occur between now and 2033, we have no other option but to take action.”
Behnam mentioned that the Commodity Futures Trading Commission (CFTC) had initiated 69 legal cases against swaps, other derivatives, and digital assets that are regarded to be commodities that are traded in interstate commerce. According to him, these cases made up more than 20% of the 82 suits that were brought in the previous year.
To be more explicit, the Chair of the Commodity Futures Trading Commission (CFTC) indicated that the agency had brought the first enforcement action against decentralized financial trading, also known as a DAO, for facilitating leveraged and margined retail commodity trades to the general public.
According to what has been reported, the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Ooki DAO in September 2022, accusing the company of operating an unlicensed crypto futures trading facility and failing to complete appropriate know-your-customer checks.
In the meantime, Behnam proceeded by saying that changes in the commission’s budget will assist in contributing to the enhancement of its enforcement team as well. He said that the group was “working toward another difficult year of precedent-setting cases” against unethical or illegal activities that use digital assets. He was referring to the lawsuits that were being brought against these types of businesses.
The boss of the Commodity Futures Trading Commission said at the end of 2017 that Bitcoin should be regulated like a commodity. However, he stated that “Bitcoin is unlike any other commodity we’ve ever dealt with.” By making this statement, he conceded that the asset is difficult to control using the mechanisms that are already in place.
Behnam has suggested that ETH might not qualify as a commodity at all. If Ethereum is, instead, determined to be a security for purposes of regulation, then US officials are likely going to take a stricter stance against not only Ethereum but also practically every other cryptocurrency in existence.
In December, the CFTC filed civil complaints against FTX, Bankman-Fried, and Alameda Research for misappropriating consumer monies. This is a crucial fact to keep in mind. In addition to this group, the Justice Department and the Securities and Exchange Commission (SEC) are also looking into whether or not Bankman-Fried did anything wrong.
08 Mar 2023
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