The United States commodities regulator chief has again argued that Bitcoin and Ether — the two largest cryptocurrencies by market cap — are commodities, and his agency should be given oversight of them.
Speaking on July 9 before the US Senate Committee on Agriculture, Nutrition, and Forestry, the Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam argued that a recent court ruling in Illinois stated that Bitcoin (BTC) and Ether (ETH) are commodities.
The July 3 ruling was part of a $120 million Ponzi case involving an Oregon man accused of fraud. In the order, the Illinois district court judge said both assets qualified as commodities.
It also said that Olympus (OHM) and KlimaDAO (KLIMA) qualified as commodities, too.
“In its decision, the court re-affirmed that both Bitcoin and Ether are commodities under the Commodity Exchange Act.”
Additionally, Behnam cited a 2022 report from the Financial Stability Oversight Council, which highlighted a gap in regulation of the spot market for “digital assets that are not securities” and called for his agency to assume a greater position of oversight for digital commodities.
Behnam said ongoing inaction from other regulators in the US would not “quash public interest for digital assets” and would only result in greater risk to financial markets and investors.
“In short, our current trajectory is not sustainable. Federal legislation is urgently needed to create a pathway for a regulatory framework that will protect American investors and possibly the financial system from future risk,” he said.
Behnam says the CFTC is ready to enforce crypto rules
The CFTC chair outlined five key legislative priorities he believed his agency could introduce to better regulate digital commodities.
These included his agency’s ability to tailor rules to meet the unique risk profile of cryptocurrencies, a permanent “fee-for-service model” funding model, requiring registrants to adhere to a “comprehensive disclosure regime” regarding their crypto assets, as well as bolstering Know Your Customer and Anti-Money Laundering privileges for the CFTC.
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Finally, he urged the committee to consider a “disciplined, balanced framework” for whether or not tokens are deemed commodities or securities under existing law, as well as working to introduce a comprehensive education and outreach program concerning crypto assets in the US.
“The SEC and CFTC have a longstanding partnership that facilitates strong, robust regulation of securities and derivatives markets, Behnam said.
“I am confident that the two agencies will continue working closely, ensuring a reliable, fair, and efficient system for listing and trading of digital assets on regulated exchanges.”
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