Bitcoin’s price could ‘double’ under CFTC regulation, according to Chairman Behnam.
On Wednesday, CFTC Chairman Rostin Behnam argued that non-bank institutions, including cryptocurrency exchanges, “thrive” in regulatory certainty.
Rostin Behnam, Chairman of the Commodity Futures Trading Commission (CFTC), stated on Wednesday that CFTC-led regulation could have significant benefits for the crypto industry, including a potential increase in the price of bitcoin.
“Growth may occur if we have a well-regulated space,” Behnam told attendees at NYU School of Law during a fireside chat. “If there is a CFTC-regulated market, Bitcoin’s price could double.”
Behnam has consistently argued for the importance of providing regulatory clarity to market participants, which many in the crypto industry believe is lacking. For many years, the CFTC and U.S. The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) have squabbled over the role of top regulator for the crypto industry, with both reluctant to issue much formal guidance for crypto companies, preferring to set regulatory precedent through enforcement actions.
Behnam argued that a clear regulatory framework would make it easier for institutional investors to enter the market.
Behnam said, “These existing institutions in the crypto space see a huge opportunity for institutional inflows, which can only happen if these markets are regulated.”
“Non-bank [crypto] institutions thrive on regulation, regulatory certainty, and a level playing field,” Behnam added. “And they may argue about the type of regulation, but what they love most is regulation because they are the smartest, fastest, and well-resourced.” With those characteristics, they can outperform everyone else in the market.”
Using legislation to settle the debate
The Senate Agriculture Committee, which oversees the CFTC, introduced a bipartisan bill that would make the CFTC the primary regulator for the crypto industry, expanding the agency’s authority to oversee crypto spot markets and requiring crypto trading firms to register with the CFTC – though it stopped short of explicitly defining where one agency’s purview ended and the other began.
On Thursday, Behnam stated his support for the bill, which includes a provision that would allow the cash-strapped agency to levy fees on regulated entities – something Behnam argued would be critical if the CFTC is to tackle the challenge of regulating cryptocurrency.
“We are currently [being] appropriated money by Congress, and it has put us in a position where we feel constantly on edge about how much money we will be appropriated,” Behnam explained. “We’re still feeling the aftereffects of about five or six years of flat funding.”
Behnam told the audience on Thursday that the CFTC’s struggle with dual issues of jurisdiction over crypto markets and a comparatively small operating budget has hampered its ability to effectively combat crypto crime.
“We’re only scratching the surface,” Behnam said. “In the 60 or so cases [the CFTC has brought], we’ve had to rely solely on whistleblowers, customer complaints, and tips that have come to us.”
“We don’t have the traditional surveillance tools, market oversight tools, to monitor trading platforms, to oversee broker-dealers or similarly situated intermediaries…those are the types of things we fall short on, not due to a lack of effort, but due to a lack of jurisdiction,” he added.