After the collapse of FTX, Benham said the future cryptocurrency regulation would only consider Bitcoin a commodity. The chairman of the CFTC will discuss his inaction against FTX and clarify whether they could have prevented its bankruptcy.
Rostin Benham, the chairman of the Commodity and Futures Trading Commission (CFTC), has denied his agency will oversee Ether (ETH) and other altcoins. Regarding future cryptocurrency regulation after the FTX collapse, he suggested they would only consider Bitcoin as a commodity.
According to Fortune magazine, Benham advised FTX to allow clients to trade borrowed money from the company rather than through a broker.
The CFTC agreed on increasing funding and oversight through the Digital Commodities Consumer Protection Act (DCCPA). The law, supported by Sam Bankman-Fried, would expand the authority of the government agency over digital commodity markets. It would also allow them to classify cryptocurrencies and treat Bitcoin and Ether as commodities.
Benham was optimistic about the bill introduced in September, which he views as a considerable step forward. While testifying in the Senate at the time, he said many crypto assets constitute commodities. Under the DCCPA, the expertise and experience of the CFTC make it the ideal regulator for that market.
The chairman of that agency reportedly said last month that he disagreed with Gary Gensler. However, he now seems to be in line with the head of SEC, who only views Bitcoin as a commodity.
Gensler remained silent regarding the status of other cryptocurrency securities but hinted that most crypto assets, including stablecoins, might be securities.
The CFTC Chairman Explains His Inaction after the FTX Collapse
US regulators have often received fierce criticism for delivering clearly-stated cryptocurrency regulations too slowly. Brian Armstrong, the CEO of Coinbase, said in November that it would have been possible to avoid the extent of the FTX collapse. However, he explained that unclear standards drove the global trading volume to currency exchanges.
However, Benham argued that the limited resources of lawmakers to take enforcement action prevented him from doing so. He added that they could not afford to wait any longer.
The chairman of the CFTC plans to discuss his inaction against FTX with the authorities soon. He will also clarify whether his agency could have prevented the collapse of the cryptocurrency exchange.
The Collapse of FTX Teaches Some Lessons to Other Platforms
Rostin Benham also testified before the US Senate Committee on Agriculture, Nutrition, and Forestry about why Congress should act on the FTX collapse.
The chairman of the CFTC told lawmakers he could not comment on possible enforcement actions against FTX. In addition, he said that those cases take time but that they were moving quickly.
He also pointed out that they should anticipate a season of mergers, acquisitions, and consolidations. That would happen while they unravel the financial transactions and relationships between platforms facing liquidity problems.
Benham urged to advance in a regulatory approach to establish protection measures to keep customers safe.
Finally, Rostin Behnam said the lesson implies comprehensive and thoughtful regulation to protect clients and prevent events similar to the FTX collapse.
Meanwhile, Ether is trading at around USD 1,283 and has accumulated a 6.6% gain over the last week. While its daily trading volume is above USD 5.96 billion, its market capitalization s about USD 154.71 billion, according to CoinGecko.
By Alexander Salazar
