Lawrence Damilola
During a speech at the Securities Industry and Financial Markets Association (SIFMA) annual meeting in New York yesterday, Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam highlighted significant challenges in regulating the cryptocurrency market due to stalled legislative efforts.
Behnam emphasized the CFTC’s limited capacity to enforce compliance and oversee the market without proper regulatory framework, expressing concern for the vulnerabilities this creates for market participants and institutional investors.
He acknowledged that progress is unlikely to occur before the year ends but remained optimistic about future developments, stating, “I’m not betting on anything happening necessarily at the end of the year, but there’s a unique appetite that this election, I think, has changed around digital assets and technology.”
SIFMA President Kenneth Bentsen also voiced concerns from the financial industry, noting the growing frustration among brokerage firms. According to Bentsen, firms are questioning whether they can operate successfully without facing enforcement actions or if it will remain a persistent risk.
Crypto Regulation Intensifies Fight vs. Fraud
In response to increasing fraud and manipulation cases in the crypto sector, Behnam confirmed that the CFTC is dedicating more resources to address such issues. At the Chainalysis Links conference, he revealed that the agency had filed 23 crypto-related enforcement actions in the past fiscal year. This figure represents nearly half of all such cases brought by the CFTC since 2015.
Behnam remarked that headlines about significant losses in digital assets due to protocol exploits, phishing attacks, and schemes targeting vulnerable individuals have “become far too common.” The surge in these incidents has prompted the CFTC to intensify its focus on enforcement.
During a confirmation hearing in 2023, Behnam stated that the CFTC was prepared to assume primary responsibility for regulating the cryptocurrency market. The question of whether the CFTC or the U.S. Securities and Exchange Commission (SEC) should take the lead on crypto regulation remains a topic of debate among lawmakers.
The Use of AI in Market Surveillance
Behnam also disclosed that the CFTC has been utilizing artificial intelligence (AI) to improve its oversight of the markets. By incorporating AI tools and analytics, the agency can sift through large volumes of data to detect market manipulation, cyberattacks, and potential compliance issues.
He expressed optimism about the potential of AI in crypto regulation, suggesting that its use could lead to a reduction in enforcement cases. “If we can start to use AI collectively to ensure compliance, I think there’s probably going to be a lot fewer enforcement cases,” he added.
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Lawrence does not hold any crypto asset. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
