Rostin Behnam, Chairman of the U.S. Commodity Futures Trading Commission (CFTC), has called for a regulatory solution to regulate the cryptocurrency market, which he says consists mostly of commodities.
Behnam expressed concern about the lack of clarity in the industry and the potential for fraud and manipulation.
In a podcast hosted by the Intercontinental Exchange (ICE) today, Behnam said that market participants, especially institutional investors, are looking for a clear regulatory framework for crypto. He also explained that individual clients need hedging from risks in the crypto space.
“The market seems to want some kind of regulatory framework,” Behnam said.
“You can predict that institutional demand will likely increase if there is a clear regulatory framework.
But to me, we think of individual participants, and I think of our ten-year practice history before me. And I think that's pretty clear evidence that something needs to be done.”
Behnam's words contradict those of Securities and Exchange Commission (SEC) Chairman Gary Gensler, who claims that most cryptocurrencies are securities and fall under current securities laws. Gensler also said that legislation is not necessary to regulate crypto.
However, Behnam argued that 70 percent of the crypto market is commodities and it needs a different approach. He noted that Congress should pass a bill that would fill the void on commodity tokens and give the CFTC more powers and resources to oversee the market.
After Behnam's announcement of the regulatory framework, there was a drop in the price of Bitcoin.
The podcast also touched on Bitcoin products such as futures and exchange-traded funds (ETFs). ICE Chief Communications Officer Josh King explained that some BTC futures contracts have been delisted recently due to low demand.
*Not investment advice.
