Rostin Behnam, former CFTC Chairman, emphasized the need for increased CFTC authority over cryptocurrencies in a televised interview on May 28, stating current laws leave digital asset markets vulnerable in the United States.
Behnam’s remarks highlight the potential risks for investors and the market without regulatory clarity, affecting cryptocurrencies like Bitcoin and Ether amid ongoing legislative discussions in Congress.
Behnam Calls for CFTC Oversight of Major Tokens
Rostin Behnam, former CFTC Chair, has been advocating for expanded oversight on digital assets. He asserts that current regulations do not cover the largest tokens, which leaves investors exposed. In a May 28 interview, Behnam emphasized the need for the CFTC to oversee Bitcoin and Ether, categorized as commodities. This move aims to fill gaps in regulatory coverage, providing a safeguard for market participants.
“If you look at existing law, the few largest tokens are commodities, which means the SEC does not have jurisdiction over those tokens, which include Bitcoin and Ether,” and emphasized, “Ultimately, until we do something, the [crypto] market will remain unregulated. Customers, investors, retail and institutional, will be more vulnerable to harm, fraud, manipulation and conflicts of interest, until the market is regulated.” — Rostin Behnam, Former Chairman, Commodity Futures Trading Commission (CFTC)
Institutional Concerns Over Regulatory Uncertainty
Behnam’s comments highlight regulatory challenges that affect institutional interest and investment flows. Stakeholders express concern over potential market vulnerabilities, emphasizing the urgency for clear regulations. The absence of a definitive regulatory framework may deter institutional players from entering the market. Historical patterns show significant impact on market levels and innovations due to regulatory uncertainties.
Past Crises Exemplify Need for Regulation
Past crypto events, like FTX’s collapse, demonstrate the consequences of unregulated markets. Historical occurrences indicate reduced institutional involvement and increased volatility during regulatory ambiguity. Industry experts suggest that expanded CFTC control could mitigate risks, drawing parallels with previous regulatory shifts. Such changes often stabilize markets by fostering greater confidence among investors.
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