CFTC Chair: New Regulations Will Divide Crypto Assets Into Two Categories
According to Rostin Behnam, the Chairman of Commodity Futures Trading Commission (CFTC), cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) could be considered as a security or a commodity for regulation purposes.
Behnam spoke with CNBC’s Squawk Box, and noted that digital assets that are deemed as commodities should be regulated by the CFTC, while those considered as securities should go under Securities and Exchange Commission (SEC).
“Within this fear of digital assets and the coins which make up thousands of thousands, they are naturally going to be some commodities and securities. In my view, it makes sense to sort of parse through the two and figure out where we can place each.
It’s going to be difficult because from a legislative standpoint and given the novelties of some of these coins and the technology, we have to figure out what will constitute the security under the traditional securities law and what would constitute more of a commodity so that we can regulate appropriately – given the two different legal structures.”
According to the CFTC Chair, the two largest digital assets, Bitcoin and Ethereum, should be viewed as commodities.
“I can say for sure Bitcoin, which is the largest of the coins and has always been the largest regardless of the total market cap of the entire digital asset market capitalization, is a commodity.
Ethereum as well. I have argued this before, my predecessors said it is a commodity. There may be, in fact, hundreds, if not thousands of security coins, but there are plenty of commodity coins that I think it makes sense, as we’ve done historically, to make sure that each agency has jurisdiction over commodities and securities respectively.”
Regardless of the perceived differences between the SEC and CFTC, the two financial watchdogs share the same objective of protecting the interest of the public, according to Behnam.
“We each are trying to do what’s best and right now, and we saw this last week, a lot of people got hurt, a lot of values lost in the market and there really are no customer protections right now. We have a number of state-level regulations and oversights but in terms of market oversight, in terms of disclosures, we don’t really have much right now as it relates to traditional financial markets…
We need to put forward a regulatory framework that will protect customers, make appropriate disclosures and ultimately, for those who support the industry, support its growth and maturity over the next couple of years.”
