The crypto market is standing at a crossroads, according to former Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam, who warned that without expanded regulatory authority for the CFTC, the space will remain perilously unregulated. Speaking on Bloomberg TV on May 28, Behnam aligned with the crypto industry’s stance that cryptocurrencies, particularly Bitcoin and Ether, should be classified as commodities. This classification ostensibly places them outside the jurisdiction of the Securities and Exchange Commission (SEC), thereby necessitating a fresh regulatory approach.
Regulatory Maze: A Turf War Unfolds
Behnam’s remarks come amid a swirl of discussions about how best to regulate this burgeoning yet volatile market. “If you look at existing law, the few largest tokens are commodities,” Behnam stated, reinforcing the idea that the SEC’s current legal framework doesn’t suffice for comprehensive crypto regulation. The CFTC, traditionally a derivatives regulator, finds itself equally restrained, unable to oversee cash markets in digital assets effectively. This regulatory impasse has left the door wide open for potential market manipulation, fraud, and investor vulnerability. For a deeper dive into the regulatory implications, see our coverage of the SEC’s latest guidance.
The backdrop to these comments includes mounting scrutiny of the Trump family’s ventures into the crypto realm. Reports suggest that Donald Trump is leveraging his political influence to bolster his family’s crypto investments, raising eyebrows and concerns among lawmakers. Sanders Townsend, a political strategist, pointed out the red flags associated with the administration’s involvement in the crypto regulatory process, emphasizing the need for compliance with established governmental rules.
A Call for Clarity: The Crypto Community’s Plea
At the Bitcoin 2025 conference, Vice President JD Vance echoed sentiments that resonate deeply within the crypto community. Vance’s speech, championing crypto’s potential while rejecting regulatory overreach, underscores the tension between innovation and regulation. However, Behnam countered this narrative by emphasizing the critical role of regulators in maintaining the integrity of financial markets. “Regulators are extremely important,” he stated, highlighting the consumer protections and legal enforcement that underpin the health of American markets. As explored in our recent coverage of the UK’s FCA seeking public views on crypto regulation, international perspectives on regulation continue to shape the global discourse.
The stakes are undeniably high. As the crypto industry continues to evolve at breakneck speed, the absence of clear regulatory guidelines could lead to increased uncertainty and risk for both retail and institutional investors. Behnam’s comments serve as a clarion call for legislative action to empower the CFTC with the authority needed to oversee this dynamic market effectively.
Looking Ahead: Uncertain Waters and Future Implications
As we move through 2025, the crypto market’s regulatory landscape remains a hotbed of debate and potential transformation. Behnam’s insistence on the necessity of CFTC oversight is likely to fuel ongoing discussions among policymakers and industry stakeholders. The question remains: Will Congress act to fill the regulatory void, or will the crypto market continue to sail through uncharted waters, vulnerable to the whims of volatility and speculation?
For investors and industry players, the path forward is fraught with challenges and opportunities. The outcome of this regulatory discourse will not only shape the future of cryptocurrencies but also determine the level of trust and stability that can be achieved in this digital frontier. As Behnam put it, until decisive action is taken, the crypto market will remain a fertile ground for potential harm, leaving many to wonder how long this regulatory limbo can persist.
In the coming months, all eyes will be on Capitol Hill and the ongoing negotiations that could redefine the rules of engagement for digital assets. Whether the CFTC will be granted the authority it seeks is a question that lingers, with implications that extend far beyond the confines of the crypto community.
Source
This article is based on: Crypto vulnerable if CFTC not given authority, says ex-chair Behnam
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
