CFTC Seeks Expanded Authority! US Commodity Futures Trading Commission Calls Cryptocurrencies "60% Commodity", Clashes with SEC

Following reports of the SEC being granted more regulatory authority over stablecoins, the acting chairman of its sister agency, the CFTC, has also urged the Senate to expand its regulatory oversight of cryptocurrencies. He believes that the rapid growth in the crypto space has posed potential risks to financial stability and investors.

SEC May Be Given Regulatory Authority Over Stablecoins

According to previous reports, Bloomberg has indicated that enforcement agencies such as the U.S. Treasury Department will release a "stablecoin report" this week, potentially granting the SEC more regulatory authority. Over the past few months, SEC Chairman Gary Gensler has expressed concerns about stablecoins on multiple occasions.

However, the U.S. Commodity Futures Trading Commission (CFTC) seems less than pleased with this outcome. Rostin Behnam, the acting chairman currently nominated by Biden, expanded his agency's powers to become a grassroots police force in the crypto space during a hearing at the Senate Agriculture Committee.

Lack of Authority

Behnam mentioned during the hearing his previous enforcement actions against BitMEX and more recently against the stablecoin issuer Tether, stating:

We have been one of the few cops on the beat due to limited statutory authority, and this is just the tip of the iceberg. As of yesterday, the crypto market cap is at $2.7 trillion, with nearly 60% of it being commodities.

Behnam's views clearly differ significantly from those of the SEC. Gensler has previously indicated that "most" cryptocurrencies fall under the category of securities.

The SEC's primary responsibility is to regulate securities trading, which involves assets traded with the expectation of future profits. Despite the SEC's firm stance, most cryptocurrencies still fall into regulatory blind spots, such as the litigious case of Ripple.

Behnam claims that 60% of cryptocurrencies are commodities, indicating a strong competition for authority with the SEC. However, he also stated:

I acknowledge that expanding regulatory authority would certainly take CFTC far from our historical role as a derivatives regulator, but the rapid growth in the crypto space has posed potential risks to financial stability and investors. If the Senate Agriculture Committee agrees, then the committee would also have jurisdiction over the CFTC.