In many places, the regulation of cryptocurrencies is still in its infancy. There is still great uncertainty in the US when it comes to dealing with Bitcoin and Co. Rostin Behnam, head of the Commodity Futures Trading Commission (CFTC), this week presented arguments in favor of crypto regulation from his authority, which investors should also like.
The CFTC chief is confident: Regulating the crypto market under the leadership of his regulator would have significant benefits and could ultimately have a positive effect on prices as well. “Growth is possible in a well-regulated environment,” Behnam said at an NYU School of Law event this week.
A clear regulatory framework could pave the way for institutional investors to enter the market. “The established institutions in the crypto space see a huge opportunity for institutional inflows that will only occur if there is a regulatory structure for these markets.”
Increasing demand from institutional investors will eventually also be reflected in rising prices in the crypto market, Behnam claims: “Bitcoin price could double if the CFTC regulates the market.” A prospect that should also appeal to regulation skeptics.
CFTC or SEC – Who Should Regulate Cryptos?
So far, opinions have been divided on who should be in charge of crypto regulation in the US. In addition to the CFTC, the SEC is also involved. The latter in particular is sometimes criticized for wanting to expand its influence through precedential decisions – while a clearly formulated set of rules for dealing with cryptocurrencies has so far been lacking.
A bill from the US Senate Agriculture Committee, to which the CFTC is formally subject, now designates the agency as the primary overseer of the crypto industry in the United States. They would then be responsible for monitoring the spot markets and crypto trading companies would then have to register with the CFTC.
Behnam expressed his support for the law last week. However, he also made it clear that in this case the funding of his beleaguered agency would have to be adjusted to do the job fairly. So far we have only seen the tip of the iceberg.
The 60 or so cases of the CFTC in the crypto space are all due solely to whistleblowers, tips or customer complaints. Mechanisms for market surveillance or monitoring of trading platforms and intermediaries are currently still lacking.
Notes on conflicts of interest:
CEO and majority owner of the publisher Börsenmedien AG, Mr. Bernd Förtsch, has taken direct and indirect positions on the following financial instruments mentioned in the publication or related derivatives that may benefit from any price development resulting from the publication: Bitcoin.
The editor-in-chief of the publisher Börsenmedien AG, Mr. Leon Müller, has taken direct and indirect positions on the following financial instruments mentioned in the publication or related derivatives that may benefit from any price development resulting from the publication: Bitcoin.
The author has direct positions in the following financial instruments mentioned in the publication or related derivatives that may benefit from any price development resulting from the publication: Bitcoin.