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Urgently regulate the crypto market: Behnam warns of risks!
Former CFTC Chairman Behnam calls for crypto market regulation. Discussion of responsibilities between CFTC and SEC.
Urgently regulate the crypto market: Behnam warns of risks!
Former Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam highlighted the urgent need for regulatory action in the crypto market in a recent interview with Bloomberg TV. In his conversation on May 28, Behnam noted that the current unregulated state of the market poses serious risks for investors and customers. He emphasized that without new powers for the CFTC, regulating non-securities digital assets would not be possible. This particularly affects the cash markets, which are essential for the stability and security of the industry.
Behnam supports the crypto industry's view that cryptocurrencies such as Bitcoin and Ethereum should be classified as commodities. This classification would mean that the CFTC would be the competent authority over these assets, while the Securities and Exchange Commission (SEC) would be excluded from regulation due to its legal limitations. The SEC does not have the authority to regulate commodities, leading to the current confusion in the regulatory landscape.
Regulatory challenges and conflicts of responsibility
The cryptocurrency market in the US is overseen by both the CFTC and the SEC, creating significant jurisdictional conflicts. The CFTC deals with commodities and derivatives, while the SEC is responsible for overseeing securities markets. It is thanks to this overlapping of responsibilities that there is uncertainty surrounding the regulation of altcoins, stablecoins and DeFi tokens. For example, stablecoins could be classified as commodities by the CFTC but as securities by the SEC, which could lead to further confusion.
Behnam warned that without clear regulatory requirements, the attractiveness of US markets is at risk. Consumer protection and law enforcement are critical to the health of financial markets, something that is highly questionable in the current regulatory landscape. Behnam also responded to criticism of the Trump family's crypto investments, while political strategist Sanders Townsend questioned Donald Trump's use of cryptocurrencies and stressed the need for clear rules for government officials.
Current developments and future outlook
The discussion about possible new regulations has gained momentum. There is speculation that up to 70% of digital assets should be classified as commodities by the CFTC. Future legislative actions, such as the House Crypto Oversight Bill of 2024, aim to more clearly define the roles of the CFTC and SEC. The two authorities recently signed a memorandum of understanding to improve their cooperation and clarify the regulatory framework.
SEC Commissioner Hester Peirce has advocated clear guidelines and warns against over-regulation of the sector. The US Treasury and Justice Departments are also expected to review anti-money laundering and anti-fraud measures in the crypto sector. Given the current regulatory issues, it is crucial that a unified regulatory framework is developed to ensure smooth and secure operations in the crypto market.
The challenges facing the crypto industry today are numerous and complex, yet voices for clear regulation by the CFTC are stronger than ever. Cointelegraph and HodlFM report that a pragmatic approach to regulation is necessary to sustainably secure the future of digital assets.