CFTC chief says most cryptocurrencies are commodities

Most cryptocurrencies are commodities, CFTC competes with SEC for the authority to regulate the digital-asset industry. Behnam, the CFTC chair, said this in a CNBC interview.

“It is figuring out how existing, decades-old law, fits into this new technology that seems to be changing and ultimately needs a new way of thinking around policy and legislating,” says @CFTCbehnam on #crypto. “Under existing law, many of the tokens constitute commodities.” pic.twitter.com/F3JPjWq3wG

— Squawk Box (@SquawkCNBC) December 12, 2023

Behnam acknowledged that there is a pressing need for a comprehensive regulatory framework for digital assets.

We are figuring out how a decade-old law fits into this new technology. The latter is changing and requires a new way of thinking about policy formulation. Under existing law, many tokens are commodities, the official said.

Behnam stressed that regulators and Congress must work together to close gaps in the regulatory framework.

According to the head of the agency, one of the key problems is the ‘war for turf’ between regulators — primarily the SEC and the CFTC — over who will regulate the growing sector.

Behnam said that Congress should step into this dispute. Lawmakers can play a decisive role in legitimising and integrating cryptocurrencies into the existing financial system, he added.

In his view, a challenge is the use of digital assets in illicit activity, including financing of terrorism. In this regard, AML and KYC play a decisive role.

He also acknowledged that attention must be paid to market stability and integrity — ensuring customer protection and preventing market manipulation, he said.

In November, Coinbase CEO Brian Armstrong complained about the lack of feedback from the U.S. Securities and Exchange Commission. The executive also noted the ongoing ‘turf war’ between the SEC and the CFTC.

In June, Behnam stated that the agency needs powers to oversee cryptocurrencies.