US CFTC chair says enforcement actions against crypto companies coming
Rostin Behnam warned crypto companies to remain ready to face enforcement actions for the next two years.
The U.S. Commodity Futures Trading Commission (CFTC) is the commodity market regulatory body. However, the US Securities and Exchange Commission (SEC) is the top financial regulatory body in the American money market but a significant portion of crypto section regulation also falls under the authority of the CFTC body. This body mainly concerns the regulation of Bitcoin & those crypto assets which subject to commodities laws.
Recently speaking at the 2024 Milken Institute Global Conference, the CFTC chairman Rostin Behnam said that the crypto sector is probably going to see another round of enforcement actions for up to 24 months.
Rostin said that the ultimate goal of enforcement action against the crypto companies will be to protect crypto investors against fraud & manipulation because, without regulation & transparency, unethical practices will always happen.
The CFTC chairman also added that regardless of the potential benefits and future possibilities of crypto technology and other crypto assets, we need to prioritise regulating them to protect consumers. This means making rules to prevent fraud and ensure people investing in these assets are safe.
Behnam also said that increasing investment in the crypto sector seems to have staying power, even though some negative events in 2022 occurred that hurt the industry, it’s still growing.
SEC vs CFTC
The US SEC body regulates those financial assets that fall under the Securities Act and the CFTC body regulates those companies that deal with commodity assets.
In the crypto space, many crypto assets belong to security as well as commodity asset class nature. Due to the dual nature of the cryptocurrencies, many times CFTC & SEC chairman passed controversial statements over the nature of cryptocurrencies.
For instance, once CFTC chairman said Ethereum was a commodity but later SEC chairman called Ethereum a security asset.
Read also: SEC chairman Gary Gensler asserts that “fraud is a significant issue within crypto”
