Commodity Futures Trading Commission (CFTC) chair Rostin Behnam says cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) can be categorized as a security or a commodity for regulation purposes.
In a new interview on CNBC’s Squawk Box, Behnam says that digital assets that are deemed as commodities should be regulated by the CFTC, and those considered securities should have the oversight of the Securities and Exchange Commission (SEC).
“Within this fear of digital assets and the coins which make up thousands of thousands, they are naturally going to be some commodities and securities. In my view, it makes sense to sort of parse through the two and figure out where we can place each.
It’s going to be difficult because from a legislative standpoint and given the novelties of some of these coins and the technology, we have to figure out what will constitute the security under the traditional securities law and what would constitute more of a commodity so that we can regulate appropriately – given the two different legal structures.”
Behnam says that Bitcoin and Ethereum, the two largest crypto assets in terms of market cap, should be considered commodities.
“I can say for sure Bitcoin, which is the largest of the coins and has always been the largest regardless of the total market cap of the entire digital asset market capitalization, is a commodity.
Ethereum as well. I have argued this before, my predecessors said it is a commodity. There may be, in fact, hundreds, if not thousands of security coins, but there are plenty of commodity coins that I think it makes sense, as we’ve done historically, to make sure that each agency has jurisdiction over commodities and securities respectively.”
He says that despite the perceived differences between the SEC and the CFTC, the two agencies share the same objective of protecting the interest of the public.
“We each are trying to do what’s best and right now, and we saw this last week, a lot of people got hurt, a lot of values lost in the market and there really are no customer protections right now. We have a number of state-level regulations and oversights but in terms of market oversight, in terms of disclosures, we don’t really have much right now as it relates to traditional financial markets…
We need to put forward a regulatory framework that will protect customers, make appropriate disclosures and ultimately, for those who support the industry, support its growth and maturity over the next couple of years.”
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