Although US Commodity Futures Trading Commission chief Rostin Behnam never managed to make it happen, the derivatives watchdog is likely to one day play a more prominent role in overseeing cryptocurrency trading, something he will “continue to advocate” for after he’s gone
Behnam, who will step down Jan. 20 to make way for President-elect Donald Trump’s appointees, said crypto “dominated every season of my tenure,” according to what will be his final public remarks as chairman delivered Wednesday at the Brookings Institution .
“Concerns regarding customer protection, increasing instances of fraud and market abuse, broader market resilience and even financial stability intensify in the absence of federal legislation,” Behnam said. “We’ve seen this before in our history, where we leave large parts of the finances outside of oversight and accountability, and we’ve seen time and time again that it ends badly.”
Addressing the “innovators” directly, he called for the protection of investors who “have shown eagerness to incorporate digital asset products into their portfolios.”
“Market regulators play an essential role in ensuring that financial innovations are socialized into a culture of regulation and compliance that protects consumers and provides legal certainty,” he said, arguing that he never advocated an enforcement-driven approach. By contrast, regulation by enforcement is the criticism the industry has long leveled at Behnam’s counterpart on the securities side, Gary Gensler, the chairman of the Securities and Exchange Commission.
In an interview on Bloomberg TV on Wednesday, Gensler – who also steps down on January 20 – reiterated his position that enforcement was a good way to deal with crypto companies and that he was following his Republican predecessor, Chairman Jay. Clayton.
“It’s a field built around noncompliance, and I’m proud of what we’ve done, of building on what Chair Clayton and others have done in the past,” Gensler said. “I think there’s still work to be done.”
Behnam long maintained a contrast with Gensler on crypto issues, including a disagreement with Gensler’s view that current laws are sufficient to police the sector.
Trump has chosen to replace Gensler at the SEC, naming former SEC Commissioner Paul Atkins as his nominee. Although the CFTC may rise to a place of higher authority over crypto trading than the SEC in the future, the incoming president has yet to appoint a successor to Behnam.
