CFTC Chair denies agency being a ‘light touch regulator’.
The Chair of the US Commodity Futures Trading Commission, Rostin Behnam, has denied suggestions that his agency would be lenient in regulating cryptocurrency, particularly after a week of events and while lawmakers consider new legislation for the industry.
During a House Agriculture Committee hearing on Tuesday, Behnam was asked for his opinions on the perception that the CFTC is less stringent when it comes to regulating cryptocurrency.
The CFTC is the regulator of choice for many cryptocurrency advocates.
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Behnam said that he did not see it as a compliment, adding that the CFTC is a principles-based regulator, which means it moves away from detailed, prescriptive rules and relies on broadly stated principles.
“So I think it’s easy for critics, which there are always critics, to say ‘oh they’re a quote light touch regulator because they’re a principles-based regulator,’” Behnam said. “That couldn’t be farther from the truth.”
Lawmakers also asked Behnam about a discussion draft, which was released last week, and seeks clarity on when a digital asset would be considered a security and thereby regulated by the Securities and Exchange Commission, while creating a process on how digital assets are treated and how intermediaries can register with the SEC or the CFTC.
Representative David Scott, D-Ga., asked Behnam to estimate how long it would take to implement new rules for cryptocurrency between the SEC and CFTC.
Behnam said that with additional funding, it would take at least one to two years, but without that funding, it would take closer to three to four years.
Behnam was also asked about the SEC’s lawsuit against blockchain on Tuesday, which named 13 cryptocurrencies as securities, and whether those were properly classified as securities.
Behnam said he wasn’t going to answer that due to it being active litigation.
“I’ll just say this, this is a reason we’re here,” Behnam said. “There is confusion. There’s uncertainty and there’s a number of active cases that are going on and hopefully we can resolve some of these differences in the future.”