Outgoing CFTC Chairman Rustin Behnam Urges Stronger Cryptocurrency Regulation Ahead of Departure

Rustin Behnam, outgoing Chairman of the US Commodity Futures Trading Commission (CFTC), made his final public statements on January 8, 2025, during a friendly conversation at the Brookings Institution. Behnam, who will step down from his position on February 7, 2025, after serving since 2022, discussion The future of cryptocurrency regulation. He called for stronger regulatory oversight as digital assets continue to merge with traditional financial institutions, which he said could lead to challenges for the next leaders of the Commodity Futures Trading Commission (CFTC). He stressed that expanding cryptocurrencies without proper guardrails could create long-term risks.

In his remarks, Behnam stated that he plans to continue advocating for the CFTC to address the regulatory gap in the cryptocurrency space even after his departure. He stressed the need for clearer rules as more entities shift from traditional models to structures that combine different financial activities and new products. According to Hannam, this trend creates new regulatory challenges that the CFTC must address.

Behnam warned that the process of enacting new cryptocurrency legislation will take time, citing the transition to a new presidential administration and the shift of Congress as key factors that could slow the legislative process. He estimated that it would take six to ten months to pass legislation related to cryptocurrencies, and even then, agencies would need an additional year to develop rules. Despite the delay, Behnam expressed his hope for progress, indicating that he would continue to call for the organization, even after leaving office.

Legislative efforts to regulate cryptocurrency have seen mixed reactions, especially from decentralized finance advocates. Behnam pointed to bills proposed by lawmakers such as Rep. Patrick McHenry and Sen. Debbie Stabenow, which would place digital commodities under the jurisdiction of the Commodity Futures Trading Commission (CFTC). He acknowledged that the draft laws were not perfect but still represented important steps in the regulatory process. Behnam also stated that the current regulatory environment was not adequate to deal with the complexities of the cryptocurrency market and that changes were necessary to prevent further risks.

Behnam’s call to regulate cryptocurrencies comes at a time of broader shifts in financial oversight. SEC Chairman Gary Gensler, who will also step down in the coming weeks, echoed Behnam’s concerns about the cryptocurrency industry. Gensler criticized the industry for being riddled with “bad actors” and stressed the need for regulators to maintain oversight. As part of the incoming administration’s plans, Trump said he intends to nominate former SEC Commissioner Paul Atkins to replace Gensler.

During his tenure at the CFTC, Behnam oversaw enforcement actions against major players in the cryptocurrency market, including the now-defunct FTX exchange. As Behnam prepares to leave office, his push for stronger regulation in the digital asset space remains an important issue for future policymakers.