U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler and U.S. Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam attended a hearing of the Senate Appropriations Subcommittee on the 13th to talk about their respective agencies’ budget requests. At the same time, senators also targeted cryptocurrency. Extensive inquiries were launched on regulatory issues.
Does the CFTC have the ability to regulate cryptocurrencies?
The Block reported that the U.S. House of Representatives passed a bill last month that would give the CFTC more power and funds to regulate cryptocurrencies. When Senator Dick Durbin asked Rostin Behnam why he thought the CFTC could become an effective regulator of cryptocurrencies?
Rostin Behnam replied that there is a gap in the supervision of "non-security commodity tokens". The CFTC has done a good job in taking enforcement actions against cryptocurrency entities. The CFTC has sufficient ability to supervise the market it is authorized to supervise. If the CFTC is given He would certainly like an increase in the budget for oversight powers over the cryptocurrency market.
Dick Durbin also asked Gary Gensler, the former chairman of the CFTC, whether the CFTC can assume the responsibility of regulating cryptocurrencies. Gary Gensler responded:
I think it depends on what powers they're given, the CFTC doesn't have a disclosure-based regime, investors don't have those disclosures for products like corn or wheat or oil, it's a great agency, but it was set up for derivatives.
It seems to be an insinuation that the CFTC is not capable enough to assume the responsibility of regulating cryptocurrencies.
The CFTC has far fewer human resources than the SEC
It is worth noting that the U.S. House of Representatives passed the cryptocurrency market structure bill "Financial Innovation and Technology Act for the 21st Century" (FIT21) last month, and then it needs to be sent to the Senate for review. This Republican-led bill won 71 Democratic votes Supported by people's votes, the bill gives the CFTC new jurisdiction over "digital commodities" and says the SEC will oversee "digital assets offered as investment contracts."
Extended reading: Interpretation of the US "FIT21 Cryptocurrency Act": Impact on the Web3 World in the Next 10 Years
Maxine Waters, a member of the House Financial Services Committee, believes that the FIT21 bill will stretch the CFTC’s resources or weaken the CFTC’s enforcement of the financial industry. After all, according to the SEC’s official website, the SEC has 4,500 employees, but according to the fiscal year 2024 budget, the CFTC has only about 700 employees.
If FIT21 is successfully passed in the future, it remains to be seen whether the CFTC will have enough energy to implement supervision or whether it will significantly expand its staff.
