Senator Durbin raised concerns about the CFTC’s ability to effectively regulate the crypto sector during a recent Senate Appropriations subcommittee hearing. He questioned CFTC Chair Rostin Behnam and SEC Chair Gary Gensler about the agency’s readiness to handle increased responsibility and the impact on the industry’s growth and compliance.
Behnam acknowledged the need for additional resources to expand the CFTC’s regulatory scope, despite past enforcement actions against crypto entities. Gensler, drawing on his experience as former CFTC Chair, emphasized the differences between current regulatory frameworks and the requirements for overseeing crypto markets effectively.
The passage of the FIT21 bill in the US House assigned new jurisdiction to the CFTC over “digital commodities,” while the SEC would oversee “digital assets offered as part of an investment contract.” This legislation aims to clarify regulatory responsibilities between the two agencies, but concerns have been raised about overstretching the CFTC’s resources and weakening its enforcement capabilities.
House Financial Services Committee Ranking Democrat Maxine Waters and Sen. Bill Hagerty also expressed doubts about the regulatory approach to cryptocurrencies, with Hagerty specifically referencing the collapse of the crypto exchange FTX and the industry’s tendency to avoid the US market due to regulatory uncertainty.
As discussions continue on how best to regulate the rapidly evolving crypto sector, it is clear that additional resources and clear regulatory frameworks will be essential for ensuring growth and compliance within the industry.