Commodity Futures Trading Commission Chair Rostin Behnam expressed concerns over the recent approval of spot bitcoin ETF products, fearing that it introduces risks. He reiterated the need for federal legislation to regulate cryptocurrencies.
CFTC Chair Behnam Voices Worries Over Spot Bitcoin ETFs
Behnam’s remarks follow the Securities and Exchange Commission’s approval of the first batch of spot bitcoin exchange-traded funds two weeks ago, which have seen substantial trading activity amounting to billions of dollars.
In prepared remarks at an American Bar Association event on Friday, Behnam stated, “I fear that the regulatory approval of bitcoin ETPs introduces risk that, in spite of yellow flags, market participants, retail and institutional alike, may mistake the technical approval of a product—with actual regulatory oversight of the cash commodity digital assets.”
Behnam emphasized that no federal regulator has been granted authority by Congress over the cash markets for digital assets. He has consistently called for legislation to regulate crypto, though efforts to craft bills in this regard have faced challenges in garnering sufficient support.
“The concerns I have publicly voiced for the better part of six years regarding the digital asset commodity spot market have only become magnified,” Behnam remarked. “The need for federal legislation over cash market digital assets has never been more critical, and I will continue my call for action.“
Behnam also highlighted his agency’s efforts in pursuing wrongdoers within the crypto space, asserting that the agency established itself as the leading enforcement authority in 2023.
Throughout fiscal year 2023, the agency initiated 96 actions, with 47 relating to digital assets. Among the notable cases were those involving former FTX CEO Sam Bankman-Fried, crypto exchange Binance and its CEO Changpeng Zhao, as well as Celsius and its former CEO Alex Mashinsky.