CFTC Chairman Rostin Behnam said the agency is open to serving as the primary regulator for crypto during a Senate Agriculture Committee hearing on digital commodity oversight.
The hearing continued 10th of Julybroadly concerned the CFTC’s request for greater regulatory authority.
Senator Roger Marshall asked Behnam whether it would be “easier” to make the CFTC a primary regulator for digital assets, while leaving a small number of “offshoots” to the SEC.
Behnam replied:
“I speak for myself, [we] would love to do that. I think we have the capacity to do that, with our expertise and experience.”
However, Behnam said changes in the definitions of securities and commodities would be necessary if the CFTC takes over primary authority.
Collaboration with SEC valuable
Marshall previously asked Behnam whether he supports allowing the SEC to decide which assets fall under the CFTC’s jurisdiction.
Behnam said he does not support the SEC making such decisions alone, but added that the two agencies have worked together for about 50 years to define gray area assets.
Marshall also asked whether the CFTC is concerned that there will be lawsuits over conflicting asset designations. Behnam said he “can’t say this won’t happen,” but the collaboration between the SEC and the CFTC will help resolve emerging legal questions.
Behnam acknowledged Marshall’s concerns that lawmakers could enable such lawsuits, but emphasized the need for a contract listing system that aligns with the CFTC’s existing powers and allows for cooperation with the SEC. Behnam said:
“I think there is a way to build a contract listing system that does not prolong or delay the listing of contracts on a regulated market.”
Behnam said the CFTC wants to introduce tokens and contracts into regulated markets “as quickly as possible” to reduce or eliminate risks for investors.
Most
Behnam believes that a significant portion of the crypto market should fall under the purview of the CFTC as they cannot be classified as securities. During the hearing, Behnam said that more than 70% to 80% of the crypto market does not fall under the securities category, leaving the area without direct federal oversight.
He said the CFTC needs at least $30 million in the first year and at least $50 million in the second year to establish a regulatory regime. The funding would go towards staff, administration and IT expenses. User fees submitted by registrants would offset the amounts requested.
Behnam also echoed Senator Cory Booker’s concerns about the urgency, stating that if the CFTC is not given authority, fraud and manipulation will continue to impact individuals in the US.