By Nathan Ferguson
The chairman of the CFTC (Commodity Futures Trading Commission) expressed on Wednesday (while in a hearing of Senate Committee) that the organization thereof intends to be a regulator of the spot market of cryptocurrency. Rostin Behnam (the CFTC Chairman) stated in a Senate Committee on Agriculture – discussing the evaluation of the digital assets, the hazards, innovation, and regulation thereof – that none of the authorities was efficiently overseeing the spot trading operations of cryptocurrency.
CFTC Chairman’s proposal
He added that the markets of cash commodities take advantage of federal oversight, nonetheless, the market of digital assets – which is currently the most straightforwardly supervised through the licenses of money transmitters – is exclusive and poses several unique issues to be handled on the behalf of the CFTC, in line with their limited power to perform a check and balance over these markets.
Behnam referred to decentralized finance as well as the digital assets as being far from the research phase and mentioned that his institution was having the adequate structure to become the chief regulator of the market dealing with digital assets and cash commodities.
Ether, Bitcoin, and physical goods are included in the category of cash commodities contrary to the derivatives. He pointed out that the implementation of a regulatory agenda over the crypto market is the single most important step which could be sufficient and effective for the protection of consumers if Congress moves on to do so.
In this way, a broader regulatory oversight is demanded by the CFTC, taking account of pre as well as post-trade clarity. The comments of the chairman resembled the feelings expressed by him in October when he initially focused on the requirement for a regulatory authority to control crypto operations.
Behnam moved on to disclose that the bourgeoning market of digital assets was chiefly related to retail traders involved in speculation with having CFTC already prepared to protect investors from being manipulated or defrauded.
SEC, CFTC, and regulation
CFTC is an autonomous government-based agency which, after being established in 1974, was given the objectives of monitoring and regulating the markets of traditional derivatives with having a slight authority to regulate manipulation and fraud in the cash market. The SEC (Securities and Exchange Commission), on the contrary, is another organization under the US government to implement the laws over the securities’ related manipulation across the market. In the words of Behnam, both the agencies are still experiencing the problem which they have been facing for the recent 50 years and it might be resolved if the SEC takes care of the securities while the CFTC deals with commodities.