CFTC Chairman Rostin Behnam spoke in a webinar about how the agency, while lacking broad authority, tries to keep pace with the rapid evolution of fintech.
The United States Commodity Futures Trading Commission (CFTC), the regulatory agency that shares primary responsibility for regulating cryptocurrencies with the Securities and Exchange Commission, will undergo a restructuring to be more proactive and comprehensive, according to CFTC Chairman Rostin Behnam announced on July 25. Described as “the focal point of the CFTC’s efforts to promote responsible fintech innovation,” LabCFTC will become the Office of Technology Innovation (OTI) and report directly to the office of the president.
“We are now engaged in a more proactive and comprehensive agency-wide effort to regulate these markets with the tools we currently have at our disposal,” Behnam said at a Brookings Institution webinar, adding, “Our main policy divisions are now directly addressing how the CFTC can leverage our existing authority to bring important regulatory protections to this market.”
In addition, the commission’s Office of Customer Education and Outreach will be “realigned” within the Office of Public Affairs to better serve new retail entrants to the market. The high level of retail participants distinguishes the digital asset market from other commodities, Behnam observed, citing CFTC studies showing:
“Indicative trades from retail participants make up approximately 25% of the long open interest in the Bitcoin futures market.”
Behnam also complained about “collective analysis paralysis” by regulators as fintech has moved ahead. Behnam has not always calmly resigned himself to working with the agency’s current authorities, who lack the ability to monitor and supervise the market, as he has demonstrated today. In February, he told the Senate Agriculture Committee, which oversees his agency, that his reliance on tips and whistleblowers to uncover illicit activity “is a very, very narrow lens on what’s really going on in the market.”
Legislative proposals such as the Lummis-Gillibrand bill and the Digital Commodity Exchange Act give the CTFC more authority over cryptocurrency markets.
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