Congress Needs to Act to Address Lack of Federal Regulation of Digital Commodity Market, Says CFTC Chairman

CFTC Chairman Rostin Behnam announced testimony for the House Committee on Agriculture hearing on the topic of "Providing Clarity to the Spot Market for Digital Assets.

Rostin Behnam highlighted the need for Congressional action to address the lack of federal regulation over the digital commodity market. He also stated that bringing this volatile market out of the shadows and into the regulatory fold would protect customers, ensure market resilience and stability, and prevent contagion to the traditional financial system.

Last year, the Financial Stability Oversight Council unanimously issued a report on the financial stability risks presented by the digital asset market. One of the core recommendations called on Congress to enact legislation to fill the clear regulatory gap over the spot market for digital assets that are not securities.

Rostin Behnam said the broader digital commodity market should be subject to similar time-tested regulations focused on protection of customer assets, surveillance of trading activity, prohibitions on conflicts of interest, and imposition of stringent cybersecurity standards.

Most notably, any new legislation considered by the Congress does not undermine existing laws. Where securities laws apply, the Securities and Exchange Commission should use its robust authorities to protect customers and address information gaps between securities issuers and investors in the market.

In addition, robust customer protections are paramount for retail market participants entering a new and technically complex digital asset market. Congress should ensure that the CFTC is fully empowered to require registered entities to make necessary disclosures regarding a variety of matters, such as investment risk, cybersecurity risks, mining, settlement practices and other related activities.

TokenInsight is dedicated to covering the most important and cutting-edge trends in the world of crypto. If you have information to share with us, please feel free to contact our email news@tokeninsight.com. Your trust will be well respected.