Although the head of the US Commodity Futures Trading Commission, Rostin Behnam, never managed to make this happen, the derivatives watchdog is likely to one day play a more prominent role in overseeing trading in cryptocurrencies, something he “will continue to defend” after his departure.
Behnam, who will step down on Jan. 20 to make way for President-elect Donald Trump’s future appointee, said cryptocurrencies “dominated every season of my tenure,” according to what will be his final public comments as president delivered Wednesday at Brookings. Institution. .
“Concerns about customer protection, rising cases of fraud and market abuse, increased market resilience, and even financial stability are intensifying in the absence of federal legislation,” Behnam said. “We’ve seen this before in our history, where we left large chunks of finances outside of oversight and accountability, and we’ve seen time and time again that it ends badly.”
Addressing “innovators” directly, he urged protection of investors who “have demonstrated enthusiasm for incorporating digital asset products into their portfolios.”
“Market regulators play an essential role in ensuring that financial innovations are socialized into a culture of regulation and compliance that protects consumers and provides legal certainty,” he said, arguing that he was never in favor of an enforcement-driven approach. of the law. By contrast, regulation by enforcement is the criticism the industry has long assigned to Behnam’s counterpart on the securities side, Gary Gensler, chairman of the Securities and Exchange Commission.
In an interview on Bloomberg TV on Wednesday, Gensler, who is also set to step down on Jan. 20, reiterated his view that law enforcement was a good way to deal with cryptocurrency companies and that he was following the lead of his Republican predecessor. , President Jay. Clayton.
“It’s a field that developed around noncompliance, and I’m proud of what we’ve done, building on what Chairman Clayton and others have done before,” Gensler said. “I think there’s still work to be done.”
Behnam has long maintained a contrast with Gensler on crypto issues, including a disagreement with Gensler’s view that current laws are sufficient for oversight of the sector.
Trump chose to replace Gensler at the SEC and named former SEC Commissioner Paul Atkins as his nominee. Although the CFTC may become a place of greater authority over cryptocurrency trading than the SEC in the future, the incoming president has not yet named a successor to Behnam.
