When it comes to the proposed Digital Commodities Consumer Protection Act, the U.S. Commodity Futures Trading Commission (CFTC) has already sent Congress its regulatory framework and goals.
The Commodity Futures Trading Commission Wants Control of the Spot Market for Cryptocurrencies.
The head of the Commodity Futures Trading Commission, Rostin Behnam, recently discussed the CFTC’s plans to oversee the cryptocurrency market. During a Senate Agriculture Committee meeting, Behnam detailed the commission’s agenda.
The purpose of the hearing is to determine whether or not the CFTC should be given exclusive regulatory authority over the cryptocurrency spot market, as proposed by the Digital Commodities Consumer Protection Act (DCCPA).
Bill sponsors in the Senate included Debbie Stabenow, John Boozman, Cory Booker, and John Thune in August.
Behnam said to the lawmakers:
That “digital assets” are “often treated as commodities”
The CFTC is qualified to regulate the cryptocurrency spot market due to its extensive background and knowledge in the industry.
Behnam highlighted that his organization ensures the safety of its clients by keeping an eye on the market. In addition, it uses a disclosure mechanism to guarantee honest dealings and secure trades.
The head of the CFTC gave a comprehensive overview of the agency’s operations. His organization has issued roughly 60 digital asset-related enforcements since 2014. However, the agency depended on tips and complaints to effect enforcement due to the lack of accurate information about the digital asset spot market, which was hampered by law.
Behnam said that despite the commission’s limited authority, it has been taking a “holistic approach” to regulating the cryptocurrency sector.
In addition, according to Behnam, the organization has the resources it needs to take on the new duties.
SEC vs CFTC.
The crypto community has been advocating for the CFTC to replace the SEC as the industry’s primary regulator for quite some time. The most recent bill to pass the Senate with broad support could mark a step toward making this wish a reality.
If passed, the law would vest all “commodity” digital assets exclusively within the CFTC’s purview.
Furthermore, the sector has been demanding that Congress determine which tokens are commodities and which are securities.
As an added bonus, this would clarify for cryptocurrency exchanges which regulatory body is responsible for registering listed assets. The DCCPA laid up the rules for how digital commodity brokers should communicate with the watchdog.
This new draft is not the first piece of legislation to designate the CFTC as the primary regulator of the digital asset business.
The first bill to propose CFTC regulation of the digital spot market was introduced in April and is titled “Digital Commodity Exchange Act of 2022.” The legislation was introduced by Representatives Ro Khanna, Glenn “GT” Thompson, Tom Emmer, and Darren Soto.
The “Responsible Financial Innovation Act” was introduced in June by Senators Cynthia Lummis and Kristen Gillibrand.
Most cryptocurrencies, according to Gary Gensler, chairman of the Securities and Exchange Commission (SEC).
In Gensler’s perspective, the SEC should have authority over crypto rules since crypto assets are a form of security. Many people are against the SEC being the only regulator. Consequently, the CFTC could be beneficial to the developing infrastructure for digital assets.