It should be clear that making new rules for crypto in the US is badly needed. However, this could take years, warns Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC).
Shortage of regulation restricts crypto market
The CFTC is the other major US financial regulator, next to the Securities and Exchange Commission (SEC). The SEC this week sued the two largest crypto exchanges as these companies, and the industry, have been advocating for clearer regulation for years.
Yesterday, CFTC Chairman Behnam appeared before the US Committee on Agriculture. In a opening statement Behnam expressed concern about the lack of regulation in the crypto industry. In his statement, he explains that he has also been arguing for better rules for years, while the process is far below the desired pace.
He believes that the volatile market should be taken ‘out of the shadows’ and clear regulations should be in place. In this way, customer safety can be better guaranteed. The accessibility and transparency of investments in digital currencies is substandard in some areas and this can deter potential investors.
In his statement, he says that the Financial Stability Oversight Council (FSOC) has a report published on the risks of financial instability in the digital market. One of the most important pieces of advice is that the US Congress take action to close the legislative loophole crypto and fill effects. Behnam says there are many risks of allowing American citizens to invest millions in unregulated digital assets.
Digital regulatory requirements
New regulations are therefore necessary and fast, says Behnam. To be able to do this, Behnam argues for additional powers. According to Behnam, the CFTC can do this without violating current law. Behnam believes the CFTC can do a lot to address the current loopholes surrounding cyber security, crypto mining and other activities. If one cryptoexchange fails, he believes that the new regulations should ensure that the relevant customers do not suffer.
Benham also says the CFTC has been proactive in protecting investors in the digital marketplace. More than $4 billion in fines and damages have been awarded in a total of 85 cases, according to Behnam.
Behnam indicates that the activities of the CFTC are limited to solving crimes committed rather than prevention. That is why he expresses the need for the CFTC to be given additional powers. In his statement he ends with the request for additional funding.