Rostin Behnam, the chief of the Commodity Futures Trading Commission, likes what he sees from a new bill from U.S. Senators Cynthia Lummis and Kirsten Gillibrand that would establish his agency as a significant crypto regulator in the U.S.
“It does a very good job,” Behnam said Wednesday at a cryptocurrency event hosted by the Washington Post. “One of the trickiest things we’re going to have to do – and I think they address this very well – is deciphering between a commodity and security.”
Behnam said the legislation, a potential foundation for industry oversight introduced this week, “would give the CFTC authority to write rules and regulate these stakeholders.” And because it also sets up industry fees that would directly fund the agency, he said it would allow bringing on more people “so we can regulate the market in the right way.”
Lummis (R-Wyo.) and Gillibrand (D-N.Y.), also speaking at the Washington event, were quick to point out that the Securities and Exchange Commission – which has been perceived by the cryptocurrency industry as being more adversarial than the CFTC – is also given a major role and a new system of disclosures.
“The SEC has an enormous responsibility,” Gillibrand said, referencing the vast number of smaller tokens likely to be defined as securities. “We aren’t minimizing the role of the SEC.”
While the CFTC may oversee the most market share, because it would have authority over the trading of the largest cryptocurrencies such as bitcoin and ether, the SEC would have the “sheer numbers,” Lummis said, including the crypto efforts she said would “be the larger perpetrators of fraud.”
Lummis met with SEC Chair Gary Gensler this week, and she said he hadn’t yet read the bill but has been asked for his feedback. The Wyoming senator suggested this legislation represents a “working draft” and is open for revision. Supporters and critics have already begun weighing in on the effort, which could extend well into next year and beyond.
Galaxy Digital CEO Michael Novogratz called the bill “wildly positive,” adding the senators deserve “three cheers.”
“It’s shocking how many Democratic politicians I now have in the office getting up to speed” and trying to determine the right stance on the crypto industry, Novogratz said at a Piper Sandler conference on Wednesday.
Michael Bellusci contributed additional reporting to this story.