CFTC Chairman Warns of Increased Regulatory Action Against Crypto Firms in Coming Months
In a speech at the 27th annual Milken Global Conference, CFTC Chairman Rostin Behnam cautioned cryptocurrency firms to brace themselves for heightened enforcement measures from U.S. regulators. As retail interest in digital assets continues to rise, Chairman Behnam predicts “another cycle of enforcement actions” in the cryptocurrency space.
The U.S. Securities and Exchange Commission (SEC) has been actively pursuing legal challenges against numerous cryptocurrency firms and intensifying its crackdown on trading activities. Most recently, the SEC announced its intention to sue the cryptocurrency unit of U.S. brokerage firm Robinhood Markets.
During the panel discussion, Chairman Behnam emphasized the significance of regulation and consumer protection, citing the events of 2022 when the cryptocurrency exchange FTX collapsed. He stated, “From my perspective as a regulator, we can anticipate another round of enforcement actions in the next 6 to 18 months or 6 to 24 months due to the increasing asset appreciation and interest from retail investors.”
Chairman Behnam further emphasized the need to consider digital assets from a regulatory and consumer protection standpoint, regardless of their legitimacy and potential role in the economy, commerce, and the internet.
In March of this year, Chairman Behnam reiterated his call for Congress to pass legislation that clarifies the regulation of cryptocurrencies. This appeal for congressional action was made during a hearing before the House Agriculture Committee.
Behnam stressed the urgency of addressing the regulatory gap, citing the rapid growth of the crypto market and its increasing mainstream acceptance. He specifically highlighted the need for clarity regarding the regulatory status of Bitcoin, given its significant market share alongside Ethereum.
Behnam urged Congress to swiftly take action, emphasizing that cryptocurrencies, particularly Bitcoin, are here to stay. His call for action was prompted by inquiries into the CFTC’s budget and the growing scrutiny and interest from lawmakers.
During the Milken Global Conference, Behnam acknowledged the growth of the cryptocurrency market despite the scandals of 2022. He stated, “There is sustainability to this asset class. Despite the challenges we faced in 2022, we find ourselves in a growing market with increasing capital investment and market capitalization, as well as renewed interest from numerous entrepreneurs.”
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