Different Approaches to Regulation
Behnam highlighted the CFTC’s enforcement efforts, noting that they secured orders totaling over $6 billion in financial relief in the past fiscal year. He emphasized that 45 of these enforcement actions were related to misconduct in the digital asset market. Behnam argued that around 70% of the crypto industry should be classified as commodities, countering Gensler’s belief in the adequacy of existing securities laws.
To enforce this categorization, Behnam called on Congress to pass laws that give the CFTC explicit authority to regulate commodity tokens. He also emphasized the importance of proactive measures in cybersecurity and mentioned a legal victory against Ooki DAO, which was shut down and fined over $600,000 for violating the Commodity Exchange Act.
Behnam acknowledged the limitations of the outdated act and acknowledged the changing landscape of financial markets, which require a revised understanding of customer protections and new regulatory concerns. In summary, Behnam argued for additional regulations tailored specifically for the crypto and decentralized finance (DeFi) sectors.
The contrasting opinions between the CFTC and SEC chairs on crypto regulation have significant implications for the industry. With both agencies competing for jurisdiction, a unified regulatory approach seems unlikely at this time.