Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam is eager for his agency to shed its reputation as the friendlier regulator for the crypto industry.
Speaking at a panel discussion hosted by law firm Lowenstein Sandler in New York on Monday, Behnam said he gets “very irritated when folks start to talk about the CFTC as a more favorable regulator,” adding that his agency’s “greatest accomplishment” was its track record of crypto-related enforcement actions.
Many in the crypto industry have long perceived the CFTC as more crypto-friendly – or, at least, more open to innovation – than its sister agency, the U.S. Securities and Exchange Commission (SEC), which has often been accused of regulating via enforcement under the leadership of Chairman Gary Gensler. However, that perception has recently begun to wane as the CFTC has ramped up its crypto-related enforcement actions.
Some of those enforcement actions, particularly the CFTC’s recent lawsuit against anonymous members of a decentralized autonomous organization (DAO) have earned the CFTC the same criticism often lobbed at the SEC – that it is overstepping the law to regulate the nascent crypto industry through enforcement.
Though Behnam said his agency was not attempting to “play fast and loose” when it comes to enforcing commodities laws against crypto companies, he remains willing to be “very creative” in how the CFTC applies existing laws to encourage crypto exchanges to come into the regulatory fold.
Under Behnam’s leadership, the CFTC has increasingly cracked down on crypto crime. More than 20% of all the agency’s enforcement actions in fiscal year 2022 were brought against crypto entities.
Behnam stressed on Monday that all of those actions – as well as all of the 60-odd crypto-related enforcement actions brought by the CFTC dating back to 2014 – have been the result of anonymous tips and whistleblowers. Behnam claims that his agency does not currently have the resources to do its own data analytics and investigations, and is currently only regulating “through a pinhole.”
Two bills currently being considered by Congress seek to widen the CFTC’s authority (and boost its financial ability) to regulate the crypto spot market. Behnam, who has publicly supported both bills, said Monday that additional jurisdiction and resources would allow the agency to root out fraud and manipulation in the market.
“If we had more funds, if we had more personnel, we could bring more of this fraud and manipulation to light,” Behnam said.