CFTC Chair Advocates for Modernized Crypto Regulations and Proactive Enforcement
Summary:
CFTC Chair Rostin Behnam emphasizes the importance of updated legislation for regulating crypto activities and discusses the agency's continuous enforcement efforts. During the 2023 Financial Industry Association Expo, he highlighted the CFTC's collected penalties worth $6 billion, with a considerable portion related to digital asset misconduct. Behnam also discussed a landmark case against Ooki DAO, indicating future agency direction hinging on technological advances. His perspective differs from that of SEC Chair Gary Gensler, advocating for proactive measures in the crypto domain rather than adhering to Depression-era financial regulations.
Rostin Behnam, the head of the United States Commodity Futures Trading Commission (CFTC), underscored the importance of modern legislation for their ongoing action in the realm of cryptocurrency during his speech at the 2023 Financial Industry Association Expo in Chicago. He referred to the CFTC Enforcement Division's continuous efforts as a relentless rhythm.
In the written record of his key address to the trade association, Behnam cited $6 billion in penalties amassed by the CFTC in the 2023 fiscal year. Out of those enforcement actions, 45 were tied to offenses in the digital asset community, accounting for a significant 34% of the total 131 actions taken by the Commission from as far back as 2015.
The landmark victory logged by his agency against Ooki DAO was a crucial point made by Behnam. The litigation ended with the shuttering of the decentralized autonomous organization (DAO) and resulted in a $643,542 fine. The decision by the U.S. District Court in Northern California declared the DAO as a "person" under the Commodity Exchange Act (CEA) from 1936.
Behnam revisited the CEA when he broached the future pathway of the agency. Disintermediation, spurred by innovation like DeFi, AI, and standard WiFi is central to the new era, Behnam said. However, our current legislation, which was formed initially in a very different era, creates significant hurdles when it comes to rule-making and policy moves crucial to our mission.
Furthermore, these restrictions compel the agency to expend resources to ensure that they operate within their mandate. Looking at financial markets today, vertical integration, a result of digitization and DeFi potential, is developing and bringing about regulatory worries. According to Behnam, the way we view customer protection has also evolved.
Behnam's remarks posed a stark contrast to Gary Gensler's stance, the head of the Securities and Exchange Commission, who believes the financial legislations from the Depression-era have been greatly beneficial over the last 90 years, and any modifications to them would be unnecessary. Behnam also subtly touched on the restrictions on the CFTC's enforcement power. For him, being proactive rather than reactive to victim's pleas aligns better with the agency's mission and purpose. He ended by reiterating his stance on more power in cryptocurrency.
Published At
10/2/2023 7:34:13 PM
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