The CFTC chair Rostin Behnam told Bloomberg that decentralized exchanges (DEX) will be regulated by his agency or the SEC, even if the platforms operate autonomously or with minimal human involvement.
During the Odd Lots podcast, the official commented on the prevailing view that, since such platforms have no single company or individual behind them and they are “just code”, they cannot be regulated.
“This is the wrong way to frame the questions. What is at issue is what they offer to clients in the United States and what they are subjected to? And who created the organization and the code to offer these products?”, Behnam said.
He assured that the agency would continue pursuing unethical market participants. Behnam acknowledged that there are cryptocurrencies that fall outside the agency’s remit — those that perform solely the role of money.
In his view, digital assets can be regulated under existing US law, including using the Howey test for analysis. However, some characteristics of cryptocurrencies are unique to the realm of traditional finance and require further consideration, Behnam added.
In October 2022, the head of the CFTC warned crypto industry participants about inevitability of regulation.