The head of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, rejected talk of a confrontation with SEC over crypto regulation, despite differing views on their classification. Fortune reports.
At a New York event, Behnam acknowledged that discussions over whether Bitcoin and Ethereum are securities or commodities create the impression of a battle between the SEC and CFTC. However, he called that characterization “quite cynical”.
In October Behnam expressed confidence that the two largest cryptocurrencies fall under his agency’s jurisdiction. Similarly, most digital assets are treated in the bill introduced by Senators Cynthia Lummis and Kristen Gillibrand.
According to the head of the CFTC, the issue of splitting oversight between the agencies needs to be resolved before any rulemaking. At the same time, Behnam doubted that this would happen soon due to the U.S. Congressional elections.
According to the official, his agency will continue to work with the Securities and Exchange Commission.
“The core fear and concern is that we are not doing enough. If we had more resources, we could uncover more fraud and manipulation,” Behnam added.
He also rejected the widespread view that the CFTC would be friendlier to the crypto industry than the SEC.
“It really irritates me when people start talking about the CFTC as a more favorable regulator,” the official said.
Earlier the SEC chair Gary Gensler supported the potential expansion of CFTC powers in the crypto space. However he expressed confidence that the majority of digital assets are securities and fall under the jurisdiction of his agency.
Such an approach became the basis for nearly two years of SEC litigation with Ripple. The defendant’s main argument in the case was the regulator’s contradictory position on cryptocurrency classification.
Specifically, the company relied on a speech by former SEC Director of Corporate Finance William Hinman. In 2018 he stated that Bitcoin and Ethereum are not securities for various reasons.
During the proceedings, media revealed that those behind the filing could have been affiliated with Ethereum. On possible conflict of interest in the actions of former senior SEC officials Empower Oversight, a nonprofit, noted.
Against this backdrop, criticism of the SEC has grown more frequent from both the crypto community and government officials.
Earlier, former CFTC commissioner Brian Quintenz called SEC actions a threat to the industry and innovation, and LBRY CEO Jeremy Kauffman said the regulator’s intention “to harm or destroy the cryptocurrency industry in the United States”.
Prior to that, billionaire Mark Cuban condemned the Commission’s opaque rules, and Ripple head Brad Garlinghouse rebuked the agency for using a coercive approach.
In July, Representative Tom Emmer accused the SEC of “unethical conduct” toward industry participants and called the regulator’s actions “absolutely unacceptable”.
Earlier in September, crypto investor and YouTube blogger Yan Balina launched a fundraising drive to stand against abuses of the SEC. In particular, he cited the regulator’s broadened definition of the term “security”.
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