Urgent Need for Crypto Legislation: CFTC Chair Speaks before U.S. Congress

By: Eva Baxter

Chairperson of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, recently addressed lawmakers, emphasizing the imperative need for legislation that can provide regulatory clarity for the growing crypto industry. At the House Agriculture Committee representing the CFTC’s fiscal year 2025 budget request, Behnam dismissed the belief that crypto was a temporary phenomenon and explained that it couldn't be regulated under current frameworks.

With around 49% of actions by the CFTC in the past year tied to digital assets, despite the fact that no federal agency has complete direct regulatory authority over the industry, Behnam's call for swift regulatory action is underscored. In his testimony, he spoke about the immense growth in the significance of digital assets like Bitcoin and Ethereum, requiring proactive legislative measures.

CFTC predicts approximately 12 months to develop a comprehensive regulatory framework for digital assets following the passage of the Financial Innovation and Technology Act for the 21st Century (FIT Act). This is an advanced proposal awaiting a floor vote, designed to bring clarity to the regulatory responsibilities revolving around digital assets.

Amid questions about classifying digital currencies as commodities or securities, Behnam clarified that Bitcoin and Ethereum were commodities as they didn't fulfill the criteria to be considered as securities. He pointed to the complex regulations needed for crypto that differed from other commodities, highlighting an immense appetite for these digital assets among investors regardless of government approval.