A US regulatory body warns of a “gap” in cryptocurrency oversight

Open Editor’s Digest for free

Rula Khalaf, editor of the Financial Times, selects her favorite stories in this weekly newsletter.

The largest financial derivatives regulator in the United States has warned of a regulatory “gap” for cryptocurrencies and called for greater scrutiny of political betting markets.

Rustin Behnam, head of the Commodity Futures Trading Commission, told the Financial Times that he will step down from his position on January 20, the day of President-elect Donald Trump’s inauguration.

Behnam led the CFTC for four years as it concluded the process First federal guidelines for carbon offsets and deepening scrutiny of cryptocurrencies and so-called event contracts, including those that allow bets on elections. He oversaw the watchdog’s 2023 lawsuit against cryptocurrency exchange Binance, which led to… $4.3 billion settlement With the American authorities.

But Behnam told the Financial Times that he was concerned about the regulation of digital assets, which includes Bitcoin and others. Cryptocurrenciesremained insufficient.

“You still have a significant amount of unregulated digital asset space in the U.S. regulatory system, and it is important — given the adoption we’ve seen by some traditional financial institutions, and the massive demand for these products by both retail and institutional investors — that it’s important,” Behnam said. “We are filling that gap.”

He said the CFTC remains “well positioned to be a spot regulator for digital commodity assets.” The president, who has close contacts and support in Congress, has pledged to use his influence to continue advocating for the agency to play this role.

the That’s enough for you It has traditionally focused on commodity derivatives, such as futures and options, rather than the underlying commodity itself. But Behnam argued that many digital tokens qualify as commodities and that regulating cash cryptocurrency markets would be a “natural fit” for the agency.

Trump has not yet nominated Behnam’s successor, but the president-elect has embraced digital assets and… He chose Paul Atkinsa crypto advocate, to lead the US Securities and Exchange Commission.

Behnam said he supports “comprehensive and strong regulation” of digital assets.

“But it is important not to take shortcuts,” he added. “It’s important that we be very disciplined and intentional about how we ultimately write rules that are inspired by the law.”

Cryptocurrencies were at the center of the CFTC’s most high-profile enforcement action under Behnam, when one of the country’s smaller regulators launched a lawsuit accusing Binance, the world’s largest cryptocurrency exchange, and its CEO Changpeng Zhao of acting improperly. Legal in the United States.

Behnam told the Financial Times that he is concerned about the legality and social impact of betting on political and other events, a new market that has flourished during the elections.

In 2023, the CFTC banned Calci, a retail-focused futures market, from offering contracts that allow investors to bet on congressional elections. American judge Lift the ban After the company filed a lawsuit against the agency.

“I have great concerns” about contracts related to elections, assassinations, terrorism and gaming, Behnam said. As technology and rising retail demand drive growth in these markets, “the line will be very blurred on what is legal and what is illegal.”

Behnam called on his successor to “renew focus” on this issue, “so that we have clearer lines of what we consider permissible and impermissible.”