The US Commodity Futures Trading Commission (CFTC) pledged to regulate crypto tokens not classified as securities during a conference on February 3.
CFTC Chairman Rostin Behnam explained the regulator’s stance during the winter meeting of the Futures and Derivatives Law Committee of the ABA’s Business Law Section.
There, Benham said that there is more room for crypto regulation. He said:
“There continues to be a regulatory gap in the crypto cash market for non-security tokens, and I believe the CFTC is well positioned to fill this specific gap if Congress so chooses.”
Benham said the CFTC will participate in the last meeting of Congress to achieve that end. The 118th US Congress began on Friday and will run for two years until February 3, 2025. It maintains a Democratic majority in the Senate but features a Republican majority in the House, a factor that could affect CFTC interactions with the legislators.
Benham highlighted several bankruptcies and collapses in 2022 and said regulation is needed to protect customers and limit failures.
He then described the CFTC’s efforts in the crypto space. Benham noted that the CFTC’s enforcement branch has asked crypto derivatives platforms to demonstrate regulatory compliance. He added that the CFTC holds regular meetings with the registered platforms. He also said that a division of the CFTC is considering whether certain platforms that trade crypto derivatives should introduce trading restrictions for their employees.
Benham also highlighted specific CFTC cases from last year, including a landmark case against OokiDAO and a case against FTX and Alameda Research.
He noted that the CFTC has filed 69 actions related to digital assets to date, adding that cases involving digital assets accounted for 20% of the regulator’s 82 actions last year. He called these results “outstanding” because of the CFTC’s “very limited authority.”
The CFTC currently plays a smaller role in regulating cryptocurrencies than the US Securities and Exchange Commission (SEC). The SEC dominates the area because many crypto projects can be considered securities. The SEC often penalizes cryptocurrency exchanges, lending platforms, and token sales and deals and takes action against fraud.
Developments last year suggested that the CFTC could have a bigger role in crypto regulation. SEC Chairman Gary Gensler also backed giving the CFTC a bigger role.
Posted In: USA, Regulation
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