CFTC Chair Urges Federal Legislation Amid Concerns Over Spot Bitcoin ETFs

• Behnam reiterated his need for federal legislation to govern cryptocurrency. 
• Congress has not delegated jurisdiction to oversee the digital asset cash markets.

Rostin Behnam, chair of the Commodity Futures Trading Commission (CFTC), expressed concern that the recent licensing of spot bitcoin ETF products poses dangers and reiterated his need for federal legislation to govern cryptocurrency. 

Behnam made these comments two weeks after the first group of spot bitcoin ETFs were authorized by the Securities and Exchange Commission (SEC). Since then, these funds have seen trading activity totaling billions of dollars.

Behnam stated at an event:

“I fear that the regulatory approval of bitcoin ETPs introduces risk that, in spite of yellow flags, market participants, retail and institutional alike, may mistake the technical approval of a product—with actual regulatory oversight of the cash commodity digital assets.”

Calling for Action

Moreover, according to Behnam, Congress has not delegated jurisdiction to any federal agency to oversee the digital asset cash markets. Legislation to help regulate cryptocurrency has been advocated for by Behnam on many occasions.

A plan that would provide the CFTC further authority over the cash market has been drafted by lawmakers in recent years, but it has not yet received the necessary backing; some have even referred to it as the “wish-list of big crypto.”

Behnam further added:

“The concerns I have publicly voiced for the better part of six years regarding the digital asset commodity spot market have only become magnified. The need for federal legislation over cash market digital assets has never been more critical, and I will continue my call for action.”

Behnam said that the digital asset cash markets do not have any concrete policies to deal with the ambiguity and inconsistency that exists in relation to matters such as client safeguards and conflicts of interest.

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