Yona Gushiken
Rostin Behnam, chairman of the U.S. Commodity Futures Trading Commission (CFTC), has offered a somber prediction: a forthcoming “cycle of enforcement actions” is poised to sweep through the cryptocurrency domain within the coming six to 24 months.
Speaking at the Milken Institute’s Global Conference on Monday, Behnam emphasized the expanding scale of market activities and capital investments in the sector.
The CFTC chairman highlighted the lack of regulatory framework and transparency within the growing crypto industry, which he believes will inevitably lead to more fraud and manipulation cases.
“We find ourselves with a growing market, growing capital [and] investments, growing market capitalization, and I think a renewed interest by a lot of the entrepreneurs,” the Behnam said at the global conference.
“From my standpoint, as a regulator, we’re going to probably see in the next six to 18 months or six to 24 months another cycle of enforcement actions,” he added.
Behnam shed light on the practical challenges facing the progression of crypto-related bills through Congress before the upcoming election.
He pointed out the limited number of working days available for legislative activities, indicating a tight timeframe for substantial legislative action.
“Getting legislation done these days is difficult,” Behnam remarked, acknowledging the intricate nature of lawmaking in the current political climate.
Despite these challenges, he noted a palpable “momentum” and “desire” among lawmakers to address critical regulatory gaps within the crypto industry, with a particular focus on stablecoin legislation.
Behnam’s comments reflect the nuanced landscape of legislative efforts surrounding cryptocurrencies, highlighting both the obstacles and the growing determination among policymakers to navigate these complexities and enact meaningful regulatory measures.
The CFTC chairman’s statement came on the heels of Robinhood Markets’ announcement that it has received a Wells Notice from the SEC after its staff conducted an investigation against the brokerage firm’s crypto arm.
“After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our US crypto business,” Dan Gallagher, Robinhood’s chief legal and compliance officer, said in a statement.
Last month, Behnam urged Congress to enact laws that provide robust oversight of digital assets, aiming to safeguard American investors and ensure the stability of the financial market.
This push for enhanced regulatory measures by the CFTC is seen as crucial in delineating the roles and responsibilities with the Securities and Exchange Commission, with whom they frequently overlap in crypto oversight.
As the details of the anticipated enforcement actions remain under wraps, industry observers and market participants are preparing for a regulatory landscape that could potentially reshape market dynamics and investor strategies.
