Commodity Futures Trading Commission (CFTC) Chairman, Rostin Benham, who went on CNBC’s Squawk Box interview recently and talked about the need for crypto regulations, and said that a lot of cryptocurrencies are commodities.
Here’s what Benham had to say, “It is figuring out how existing, decades-old law, fits into this new technology that seems to be changing and ultimately needs a new way of thinking around policy and legislating. Under existing law, many of the tokens constitute commodities.”
Read: US SEC Coins New Term For Digital Assets In Its Recent Investor Alert Letter – Details
CFTC vs. SEC: Who Gets To Rule Crypto?
So, there is clearly a turf war going on between the CFTC and the SEC. And the CFTC Chairman’s statements, of course, contradict what the SEC Chairman Gary Gensler has been saying.
For the past few years, both agencies have been competing for complete control over the crypto markets, and this has led to confusion and uncertainty for most businesses and investors — the lack of clear regulatory framework is slowing innovation in the crypto industry.
The House Financial Services Committee, which has also been going after Gary Gensler, said, “This is why we must pass the bipartisan Fit21. Fit21 provides much needed clarity with marching orders for both regulators & robust protections for consumers.”
From the tweet, they highlighted that the CFTC Chairman claims that many digital assets are commodities, while the SEC Chairman says they are all securities. Therefore, the Fit21 bill can provide much needed clarity for both regulators and the much needed protection for consumers.
For context, Fit21 (also known as the “Financial Innovation and Technology for the 21st Century Act”) is the market structure for cryptocurrencies and digital assets. There is also a stablecoin bill in the House which is led by House Financial Services Committee Chairman Patrick McHenry.
Paul Grewall, who is the Chief Legal Officer at Coinbase, also weighed in on the matter, saying, “Meanwhile, the Chair of a certain other federal agency claims the opposite and browbeats anyone acting in good faith who suggests otherwise. This is fair notice?”
Read: DEBT Box Urges Judges To Toss Suit As SEC Got Case Badly Wrong
Final Thoughts
This is a good thing that Rostin Benham is speaking up and once again highlighting Gary Gensler does not know what he is talking about. And hopefully the House can get these two bills voted on in Q1 of 2024.
Finding the best path forward for this requires finding a balance between the two financial governing bodies. We may likely see comprehensive regulatory frameworks pop out requiring input from the CFTC and the SEC. It is a difficult situation but it will be interesting to see how it plays out in the coming months.