CFTC Seeking Jurisdiction Over Cryptocurrency Spot Market

The head of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, recently discussed the agency's plans to oversee the cryptocurrency industry. Behnam presented the plans of the commission during a parliamentary hearing that was held in front of the Senate Committee on Agriculture.

The purpose of this hearing is to evaluate whether or not the Digital Commodities Consumer Protection Act (DCCPA) is suitable to enable the CFTC to become the only regulator over the cryptocurrency spot market.

The bill was initially presented to the Senate in the month of August by Senators Debbie Stabenow, John Boozman, Cory Booke, and John Thune.

In his remarks to the legislative body, Behnam pointed out that:

"Most digital assets are commodities. "

It is suitable to supervise the cryptocurrency spot market because the CFTC has both the experience and the expertise necessary for the job.

Furthermore, Behnam added that his organization is responsible for the protection of customers through the oversight of the market. In addition to this, it has a disclosure system that ensures all transactions are both transparent and secure.

The head of the CFTC provided an in-depth overview of the organization's operations. Since 2014, his agency has issued close to 60 enforcements in cases involving digital assets. In spite of this, the agency relied on tips and complaints to carry out enforcement activities because the law prevented it from collecting comprehensive information regarding the spot market for digital assets.

Behnam pointed out that despite having limited authority, the commission has been using an all-encompassing strategy to regulate the cryptocurrency industry.

In addition, Behnam stated that the organization is ready to take on the expanded duties as it presently possesses the necessary resources.

CFTC over SEC?

The digital asset industry has, for some time now, been putting pressure on the Commodity Futures Trading Commission (CFTC) to take over regulation of the cryptocurrency space rather than the SEC. The most recent bill to be approved by the Senate with support from both parties could be the first step toward fulfilling such a request.

In the event that the bill is passed into law, the CFTC would be granted sole regulatory authority over all digital assets that are classified as commodities.

In addition, the industry has been demanding that Congress define which tokens should be considered commodities and which should be considered securities.

Furthermore, this would provide crypto exchanges with clarity regarding the agency that should be responsible for registering their listed assets. The DCCPA provided an explanation of how digital commodity brokers and the regulator are supposed to communicate with one another.

Despite this, the new bill is not the first piece of legislation that would make the CFTC the primary regulator of the industry that deals with digital assets.

In April, the "Digital Commodity Exchange Act of 2022" was the first bill to call for oversight of the digital spot market by the CFTC. This oversight was to be provided by the CFTC. Representatives Ro Khanna, Glenn “GT” Thompson, Tom Emmer, and Darren Soto introduced the bill.

The "Responsible Financial Innovation Act" was presented to the Senate in the month of June by Senators Cynthia Lummis and Kristen Gillibrand.

The chairman of the Securities and Exchange Commission (SEC), Gary Gensler, is of the opinion that the vast majority of cryptocurrencies should be categorized as securities.

According to Gensler, since cryptocurrencies are considered to be security products, regulatory oversight of them ought to be the responsibility of the SEC. There are a lot of people who are against the SEC becoming the only regulatory body. As a consequence of this, the CFTC may end up being beneficial for the developing ecosystem of digital assets in more ways than one.