Chairperson Commodity Futures Trading Commission (CFTC) Rostin Behnam argues that fiat-based stablecoins are commodities, despite Congress failing to pass a bill to comprehensively regulate the digital asset industry.
CFTC: Most stablecoins are commodities
Leader Commodity Futures Trading Commission (CFTC) considers most stablecoins a commodity and argues that the new law cannot change this classification.
Speaking at a hearing before the US Senate Agriculture Committee, CFTC Chairman Rostin Behnam stated:
“They are a range of commodities and we have to control that market, even without clear direction from Congress. Based on the examples we’ve given of stablecoins, I view USDC and similar stablecoins as commodities.”
HAPPENING NOW: Chairman Rostin Behnam is testifying before the US Senate Committee on Agriculture, Nutrition, & Forestry to discuss “Oversight of the Commodity Futures Trading Commission.” Read his testimonies as prepared here: https://t.co/00mlCrEAle
— CFTC (@CFTC) March 8, 2023
As proof of his point, Mr. Behnam cited the sanction decision The CFTC once enforced against Tether – the stablecoin issuer USDT and the Bitfinex exchange in 2021. At that time, the agency concluded that Tether “made false statements and concealed the truth” behind the security mechanism. USDT token and Bitfinex engaged in illegal off-exchange trading activities.
The above statement of the CFTC somewhat “conflicts” with the responsibility of the US Securities and Exchange Commission (SEC). Last month, the SEC sued Paxos alleging that stablecoin BUSD tied to the Binance BUSD brand was an unregistered security. After the allegation, Paxos immediately stopped issuing this stablecoin.
“Disagreement” on Ethereum between SEC and CFTC
Behnam and SEC Chairman Gary Gensler famously often disagree on Ethereum, the second largest cryptocurrency by market capitalization. Despite repeatedly reasserting Bitcoin is not a security, Gensler often has an uncertain attitude about ETH.
In 2018, former SEC Chairman Jay Clayton confirmed that Ethereum and similar decentralized crypto assets are not securities, even if they were initially sold through an illegal securities offering. France.
Since Ethereum moved to The Merge, Mr. Gary Gensler believes that All Ethereum transactions are under US jurisdictionsee ETH staking mechanism is a security investment.
In his latest statement at the beginning of March, the SEC Chairman affirmed that “only Bitcoin is not a security”.
In this regard, Mr. Behnam recently told the press that:
“We have adjusted transactional aspects related to Ethereum. It is no coincidence that futures are listed on the CFTC market. We did our analysis before we came to the conclusion that Ethereum is a commodity and I have been pretty consistent with that so far.”
In a lawsuit filed against FTX in December 2022, the Asset Futures Trading Commission once again mentions Ethereum (ETH) as a commodity.
CFTC urges Congress to act quickly
Also during the hearing, Mr. Behnam emphasized the acceleration of the legal framework for comprehensive regulation of the crypto industry by the National Assembly. Behnam says:
“History has shown over the decades that comprehensive regulation helps prevent fraud and manipulation, thereby stabilizing markets and ultimately protecting customers.”
In addition, the law is also an effective assistant, supporting the regulator to crack down on the activities of foreign crypto companies that violate US laws, taking FTX as an example.
The Chairman of the CFTC once stated that If his agency gains control of the crypto spot market, they will better protect investors and tame bad actors.
CFTC Empowerment Bill Still Going
As Kyptos reported, the US Senate is still working on a bill that will empower and outline the direction for the CFTC to regulate the cryptocurrency market. Now, The author group of two senators Debbie Stabenow (D-Mich.) and John Boozman (R-Ark.) are still working on perfecting them. The Digital Goods Consumer Protection Act (DCCPA)after the incident FTX scandal – failure is sampled by the SEC for the market.
The bill still does not clearly define which tokens are securities – which are regulated by the SEC and which tokens are commodities – under the jurisdiction of the CFTC. Still, there was praise from the CFTC chairman, especially the provision that allowed the agency to tax regulated entities.
Over the years, despite being both the top US financial watchdogs, the CFTC and the US Securities and Exchange Commission (SEC) have clashed many times over their role in overseeing the crypto industry. . Because of their differing responsibilities, both are reluctant to issue guidance independently, rather than jointly setting a common precedent. However, it may take a long time for both agencies to reach common ground.