Bringing crypto market ‘into the sunshine’ doesn’t address enforcement: CFTC chair

Time Stamp: February 9, 2022 4:13 PM
Source Node: 1605526

Commodity Futures Trading Commission chair Rostin Behnam is trying to members of Congress to address the Commission’s lack of enforcement authority within the digital asset house.

At a Wednesday listening to titled “Examining Digital Assets: Risks, Regulation, and Innovation,” Behnam told lawmakers with the Senate Committee on Agriculture, Nutrition, and Forestry that the CFTC’s authority was at present restricted to addressing fraud and themanipulation of digital belongings with no clear regulatory framework. The CFTC chair added that as a result of there was at present a patchwork of regulation and enforcement authority throughout a number of authorities businesses, the majority of the company’s actions taken within the final seven years “have largely relied on tips and whistleblowers” who introduced crypto scams and different illicit actions to the CFTC’s consideration.

“We have a number of exchange-traded derivatives on crypto assets on several registered CFTC exchanges, but the visibility to the underlying market is limited at most,” stated Behnam. “In essence, this is an unregulated market […] there is so much that we are not able to see because of this limited authority.”

The CFTC chair added:

“We don’t have any of these very advanced tools to monitor markets so it’s giving us a very, very narrow lens into what is actually happening in the market. This is why I think as you contemplate more regulatory authority for the CFTC, bringing this market into the light so to speak with more transparency will only allow us to see what’s going on underneath the hood.”

CFTC chair Rostin Behnam addressing Senate Agriculture Committee on Feb. 9

Behnam, who served as performing chair of the CFTC since January 2021 earlier than being confirmed by the Senate final month, has beforehand likened the federal government company’s enforcement of the digital asset space to a beat cop on obligation. With Behnam serving as chair, the CFTC has been part of enforcement instances in opposition to crypto derivatives change BitMEX — wherein the agency agreed to pay a $100 million civil monetary penalty — and Tether and Bitfinex, which the commission fined $42.5 million in October.

“There is no one regulator, either state or federal, with sufficient visibility into digital asset commodity trading activity to fully police conflicts of interest and deceptive trading practices impacting retail customers,” said Behnam in his written assertion to the committee.

Related: US lawmakers urge CFTC and SEC to form joint working group on digital assets

The second panel of the listening to of the Senate Agriculture Committee will give lawmakers the chance to address business specialists together with FTX US CEO Samuel Bankman-Fried. On the opposite facet of the hill, House members of the Committee on Financial Services gathered to discuss the recommendations from the President’s Working Group on Financial Markets report on stablecoins on Tuesday.

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