According to The Block, Rostin Behnam, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), once again urged legislators to take action on legislation to grant the agency new powers over the industry, as cryptocurrency-related issues are consuming CFTC resources.
Behnam testified before the House Agriculture Committee on Wednesday, stating that in the 2023 fiscal year, over 49% of CFTC’s enforcement actions were related to digital assets, and the market is continuing to grow. He noted that a market they do not directly regulate accounts for half of their enforcement cases, and it is not just the enforcement department’s resources being consumed, but also the need for experts from different departments to collaborate on cases.
Behnam also highlighted the recent increase in cryptocurrency values and the optimism of retail investors, calling it a “wake-up call,” and reiterated the need for a regulatory framework, stating, “This is not about legitimizing the technology, it’s 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 responsibility to the CFTC and provide guidance for transitioning digital assets from securities investments to commodities. However, due to lack of necessary support, the bill’s chances of passage and submission to the U.S. President’s desk are slim.
Several lawmakers inquired during Wednesday’s hearing about the possibility of CFTC quickly implementing its regulatory framework if the bill were to progress. Behnam stated that the agency would need a year to do so, and also added that the recent record high price of Bitcoin underscored 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 the regulators from the Securities and Exchange Commission (SEC) have not provided a clear stance on this.
Prior to this, cryptocurrency platform Prometheum obtained a special purpose broker-dealer license from the SEC last year, and announced last month that its subsidiary, Prometheum Capital LLC, would provide custody services for Ethereum. Iowa Republican Congressman Zach Nunn expressed concern on Wednesday, stating, “I am worried that the SEC will take this opportunity to bypass Congress or even the CFTC, further confusing participants already in the field.”
Behnam mentioned that he has not communicated with Prometheum, but stated that the decision to custody Ethereum was the company’s independent decision, not the SEC’s decision. Behnam said: