The US Commodity Futures Trading Commission (CFTC) has pledged to regulate crypto tokens that are not classified as securities at its next meeting. February 3rd.
CFTC Chair Rostin Behnam outlined the regulator’s stance at the ABA Business Law Section’s Derivatives and Futures Law Committee winter meeting.
Benham said there is still room for crypto regulation. He said:
“There remain gaps in the regulation of the cryptocurrency market for non-security tokens, and I believe the CFTC is well positioned to fill this particular gap if Congress so chooses.”
Benham said the CFTC will participate in Congress’ latest meeting to achieve its goals. The 118th Congress begins on Friday and will run for two years until February 3, 2025. While the Senate retains a Democratic majority, the House of Representatives is dominated by Republicans.
Highlighting various bankruptcies and collapses in 2022, Benham said regulation is needed to protect customers and limit failures.
Next, he explained CFTC’s efforts in the cryptocurrency field. Benham said the CFTC’s compliance department has asked the crypto derivatives platform to demonstrate regulatory compliance. He added that the CFTC conducts regular meetings with registered platforms. He also said one CFTC division is considering whether certain platforms that trade crypto derivatives should introduce trading restrictions for their employees.
Benham also highlighted certain CFTC lawsuits over the past year, including the landmark lawsuit against OokiDAO and lawsuits against FTX and Alameda Research.
He noted that the CFTC has filed 69 lawsuits related to digital assets to date, adding that lawsuits related to digital assets accounted for 20% of the regulator’s 82 lawsuits last year. . He called these results “excellent” because of the CFTC’s “very limited powers”.
The CFTC currently plays a smaller role than the U.S. Securities and Exchange Commission (SEC) in crypto regulation. The SEC dominates this area as many cryptocurrency projects can be considered securities. The SEC often penalizes cryptocurrency exchanges, lending platforms, and token sales and offerings, and takes action against fraud.
Developments last year suggested that the CFTC could play a bigger role in regulating cryptocurrencies. SEC Chairman Gary Gensler also supported giving the CFTC a greater role.