While US Commodity Futures Trading Commission chief Rostin Behnam has not done so, the derivatives watchdog is likely to one day play a more prominent role in overseeing cryptocurrency trading, something he “continues to defend” after his passing.
Behnam, who? will step down on January 20 to make way for President-elect Donald Trump’s appointee, said crypto has “dominated every period of my tenure,” according to what will be his final public statement as the chairman delivered Wednesday at the Brookings Institution.
“Concerns about customer protections, increased opportunities for fraud and market abuse, broader market stability, and even financial stability are heightened in the absence of federal legislation,” Behnam said. . “We’ve seen it before in our history where we leave large areas of finance outside of oversight and responsibility, and we’ve seen it end badly over and over again.”
Addressing the “innovators” directly, he urged the protection of investors who “showed eagerness to include digital asset products in their portfolios.”
“Market regulators serve an important role by ensuring that financial innovations are integrated into a culture of regulation and compliance that protects consumers and provides legal certainty,” he said, arguing that he never favored an execution-driven approach. By contrast, regulation-by-enforcement is the criticism the industry has long assigned to Behnam’s counterpart on the securities side, Gary Gensler, the chairman of the Securities and Exchange Commission.
In an interview with Bloomberg TV on Wednesday, Gensler — who will also step down on January 20 — said he believes enforcement is a good way to deal with crypto businesses, and that he’s following the lead of his Republican predecessor, Chair Jay Clayton.
“This is a field built around noncompliance, and I’m proud of what we’ve done, building on what Chair Clayton and others have done,” Gensler said. “I think there’s still work to be done.”
Behnam has long been at odds with Gensler on crypto issues, including disagreement with Gensler’s view that existing laws are adequate for policing the sector.
Trump chose to replace Gensler at the SEC, named former SEC Commissioner Paul Atkins as the person he appoints. Although the CFTC may rise to a place of greater authority over crypto trading than the SEC in the future, the incoming president has yet to name a successor for Behnam.
