The future of digital asset regulation? The CFTC, says Congressional committee

Quick Take

  • The CFTC is winning over support to expand its role in crypto among the Congressional committees that oversee the commission, as evidenced in a hearing today.
  • Support from elsewhere in Congress remains a critical question, as the commission and industry alike push to make the CFTC the go-to regulator for crypto markets. 

Within Congress, the Commodity Futures Trading Commission is picking up political momentum to regulate crypto markets directly. 

On June 23, a subcommittee of the House Agriculture Committee held a hearing on “the Future of Digital Assets Regulation.” That future, by all appearances, looks a lot like it belongs with the Commodity Futures Trading Commission. 

“Should the CFTC have direct statutory authority to regulate cash markets,” asked new subcommittee chairman Sean Maloney (D-NY). Maloney’s inquiry reflects a long-running lingering question in Washington: which regulator should take point on crypto?

“The CFTC is certainly up to the job,” answered Dr. Chris Brummer. “It obviously has to be financed and staffed properly.”

Brummer is a Georgetown Law Professor, host of the Fintech Beat podcast, and a longstanding commentator on crypto law in DC. He continued: “Irrespective of which regulator is in charge, that regulator will have to have a builder’s mentality.”

Since Rostin Behnam took over as chair of the CFTC, he’s been pushing for the legal green light from Congress to regulate crypto spot markets. 

Currently, the CFTC only has enforcement authority, which means they do not have running data on crypto exchanges. The new authority would entail a massive expansion for the CFTC — but it’s a change the crypto industry seems to be on board with, especially since Gary Gensler took over at the Securities and Exchange Commission and began dubbing all centralized crypto exchanges to be securities exchanges. 

Both the Senate and House Agriculture Committees have seemed receptive.