Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam has voiced apprehensions regarding the recent approval of spot bitcoin exchange-traded funds (ETFs) and emphasized the need for comprehensive federal legislation to regulate the crypto sector. His comments follow the Securities and Exchange Commission’s approval of the first batch of spot bitcoin ETFs, which have witnessed substantial trading activity in the past two weeks.
During an event hosted by the American Bar Association, Behnam raised concerns regarding the potential risks linked to the regulatory endorsement of bitcoin ETFs. He underscored the disparity between technical approval and genuine regulatory supervision, stressing the lack of congressional authorization for any federal regulator to oversee digital asset cash markets.
The CFTC Chair has consistently advocated for federal legislation to address the evolving challenges in the digital asset commodity spot market. Despite lawmakers’ efforts to formulate bills, including one granting the CFTC new authorities over the cash market, such initiatives have faced challenges in garnering sufficient support.
Behnam underscored the urgency of federal legislation, asserting that the need to regulate cash market digital assets has never been more critical. He criticized the lack of concrete measures addressing opaque and inconsistent practices in the cash markets for digital assets, particularly concerning conflicts of interest and customer protections.
In addition to his legislative concerns, Behnam highlighted the CFTC’s proactive stance in tackling misconduct within the crypto space. He emphasized the agency’s enforcement actions, including notable cases against figures like former FTX CEO Sam Bankman-Fried, crypto exchange Binance and its CEO Changpeng Zhao, and Celsius and its former CEO Alex Mashinsky. Despite the agency’s successes, Behnam emphasized the limitations imposed by current regulatory tools and called for empowering the CFTC with enhanced capabilities to combat digital asset fraud and manipulation more effectively.
