According to The Block, Rostin Behnam, chairman of the U.S. Commodity Futures Trading Commission (CFTC), once again urged lawmakers to take legislative action to grant the agency new powers over the industry, as issues related to cryptocurrencies are draining CFTC’s resources.
Behnam testified before the House Agriculture Committee on Wednesday (6th), stating that in the 2023 fiscal year, over 49% of CFTC’s enforcement actions were related to digital assets, and the market continues to grow. He noted that a market they do not directly regulate accounts for half of their enforcement cases, and it is not only the enforcement department’s resources that are being consumed, “we need experts from different departments to build cases together.”
Behnam also highlighted the recent increase in cryptocurrency values and the optimism of retail investors, calling it a “warning event” and reiterating the need for a regulatory framework, stating, “This is not about legitimizing the technology, it is about protecting the American public and investors.”
In July of last year, the House Agriculture Committee and the House Financial Services Committee jointly pushed for the passage of the “21st Century Financial Innovation and Technology Act,” which would give more responsibilities to the CFTC and provide guidance for a clear path from securities investment to commodities for the regulation of digital assets. However, due to a lack of necessary support, the likelihood of the bill being passed and submitted to the U.S. President’s desk is slim.
During Wednesday’s hearing, several lawmakers inquired whether CFTC would be able to swiftly implement its regulatory framework if the bill were to advance. Behnam stated that the agency would need a year to do so, while also adding that the recent historical high in Bitcoin prices underscores the need for action.
Regarding whether Ethereum is a commodity or a security, Behnam was also asked. He stated that Ethereum is a commodity, and regulators from the Securities and Exchange Commission (SEC) have not given a clear stance on this issue.
Prior to this, the cryptocurrency platform Prometheum was issued a special purpose broker-dealer license by the SEC last year, and announced last month that its subsidiary, Prometheum Capital LLC, would provide custody services for Ethereum. Iowa Republican Representative Zach Nunn expressed concerns on Wednesday, stating, “I am worried that the SEC will take this opportunity to bypass Congress or even the CFTC and further confuse participants who have already entered the field.”
Behnam mentioned that he has not communicated with Prometheum, but he stated that providing custody for Ethereum was the company’s independent decision, not the SEC’s decision. Behnam said: