Head of U.S. derivatives regulator urges key crypto role for agency

Feb 9 (Reuters) – The head of the U.S. Commodity Futures Trading Commission advised lawmakers on Wednesday his agency ought to tackle a number one role in policing cryptocurrency.

Testifying earlier than the Senate Agriculture Committee, CFTC Chairman Rostin Behnam stated there was an pressing want for Congress to grant extra authority and sources to his agency to raised monitor the quickly rising digital forex market.

“In essence, that is an unregulated market,” he stated. “There is a lot that we aren’t capable of see as a result of of this restricted authority.”

Behnam’s feedback observe a letter he despatched on Tuesday to Congress, wherein he emphasised the agency’s focus in mitigating threat to particular person traders and selling market integrity as core the reason why it ought to be a central participant in any crypto regulatory regime.

Lawmakers in Congress and the Biden administration try to arrange a brand new regulatory construction for digital currencies, with the Securities and Exchange Commission additionally participating in a number of tasks to spice up scrutiny of the brand new merchandise.

“We can’t afford to attend till the following disaster. Congress should work with regulators and the Biden administration to design a framework that protects shoppers and our surroundings and retains our markets honest, clear and aggressive,” stated U.S. Senator Debbie Stabenow, chairwoman of the Senate Agriculture Committee. “The CFTC will play a key role in that effort.”

Behnam additionally recommended the participation of retail traders in digital asset markets highlights the urgency for complete crypto rules, noting that latest research point out the quantity of retail participation within the digital asset futures market is “greater than double” different futures markets.

He added that the CFTC’s lack of authority to supervise digital asset markets might be contributing to growing fraud inside the area. Although the CFTC has beforehand levied costs in opposition to main crypto gamers together with Bitfinex and Tether, Behnam stated it has been exhausting for the agency to oversee crypto exchanges working outdoors of the United States.

U.S. regulators have to this point targeted most of their crypto regulatory efforts on stablecoins, that are digital belongings whose worth is meant to be pegged to conventional currencies. Regulatory officers have stated stablecoins lack correct transparency across the stability of their reserves, making them prone to runs.

In November, a U.S. Treasury-led working group beneficial Congress go a regulation specifying stablecoins ought to be issued solely by firms which have insured deposits, like banks.

(This story corrects title of committee in paragraph 2)

Reporting by Hannah Lang and Pete Schroeder in Washington
Editing by Paul Simao and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.