CFTC Chairman Behnam expressed concern about spot Bitcoin ETFs and said it is time for new legislation.
Commodity Futures Trading Commission Chairman Rostin Behnam has again called for federal legislation to regulate cryptocurrencies, raising concerns about the risks posed by the recent approval of spot Bitcoin ETF products. I did.
Behnam’s comments come two weeks after the Securities and Exchange Commission approved the first batch of a spot Bitcoin exchange-traded fund, which has seen billions of dollars in trading activity to date.
“Regulatory approval of Bitcoin ETP raises concerns that despite the yellow signal, market participants, retailers and institutions alike may risk mistaking the technical approval of the product with actual regulatory oversight of cash commodity digital assets. There is,” Behnam said. He said he was ready on Friday note At an American Bar Association event.
Behnam said there are no federal regulators granted authority by Congress over cash markets for digital assets. Behnam has repeatedly called for legislation to help regulate cryptocurrencies. Lawmakers have been working to draft legislation over the past few years, including one bill that would essentially provide new capabilities to the CFTC. authorities In cash markets, the bill has yet to gain the support it needs, with some calling it a “wish list for big cryptocurrencies.”
“Publicly expressed concerns regarding spot markets for digital assets have grown louder over the past six years,” Behnam said. “The need for federal legislation on cash market digital assets has never been more important, and I will continue to call for action.”
Behnam said there was no firm plan to “address the opaque and inconsistent practices in the digital asset cash market” regarding issues such as conflicts of interest and customer protection.
“Instead, ETPs package speculative, highly volatile assets as shiny new products wrapped in a thin layer of indirect regulation,” Behnam said.
enforcement
Behnam also touted his agency’s moves to go after bad actors in the cryptocurrency industry and said the agency would become “the best enforcement agency in the universe” by 2023.
The agency filed 47 of a total of 96 digital asset-related lawsuits in fiscal year 2023. Notable cases include lawsuits filed against former FTX CEO Sam Bankman-Fried, cryptocurrency exchange Binance and its CEO Changpeng Zhao, and Chelsea and its former CEO Alex Mashinsky. .
“As everyone in this room knows, we only take action against digital asset fraud or manipulation when we discover or uncover anomalies, either through regulated market surveillance and oversight or through tips and complaints that we can pursue,” Behnam said. “You can get drunk,” he said. “We are doing all this by installing restrictor plates and it is making headlines,” Behnam added. “Imagine what we could do if we were given the tools to open the throttle.”
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