CFTC Chairman Warns of Increased Regulatory Actions Against Crypto Firms in the Future
Rostin Behnam, the chairman of the Commodity Futures Trading Commission (CFTC), has stated that cryptocurrency firms should anticipate a surge in enforcement actions from US regulators in the coming months and years. Speaking at the 27th annual Milken Global Conference, Behnam cautioned that another cycle of enforcement actions is on the horizon due to the rising interest of retail investors in the asset class.
The US Securities and Exchange Commission (SEC) has been actively pursuing legal challenges against numerous cryptocurrency firms and intensifying its crackdown on trading. Most recently, the SEC is preparing to file a lawsuit against the cryptocurrency unit of US brokerage firm Robinhood Markets.
During the panel discussion, Behnam emphasized the importance of regulation and consumer protection, citing the events of 2022, which saw the collapse of the cryptocurrency exchange FTX. “From my perspective as a regulator, we can expect another cycle of enforcement actions in the next 6 to 24 months due to the increasing interest and appreciation of assets by retail investors,” stated Behnam. He further added, “Apart from the legitimacy and potential role of this technology in our economy, commerce, and the internet, we must consider the regulatory and consumer protection aspects of digital assets.”
Earlier this year, Behnam reiterated his call for Congress to pass legislation that clarifies crypto regulation. During a hearing before the House Agriculture Committee, he stressed the urgency of the situation, pointing to the rapid growth of the crypto market and its growing acceptance in the mainstream. Behnam urged Congress to address the regulatory gap swiftly, highlighting the need for clarity on the regulatory status of Bitcoin, given its significant market share alongside Ethereum.
Behnam’s call for action was prompted by inquiries into the CFTC’s budget, as scrutiny and interest from lawmakers in the crypto industry continue to rise. At the Milken Global Conference, Behnam emphasized the growth of the cryptocurrency market despite the scandals in 2022. “There is sustainability to this asset class,” argued Behnam. “Despite the challenges we faced in 2022, we find ourselves in a market that is growing in terms of capital investment and market capitalization, and witnessing renewed interest from many entrepreneurs,” he added.
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