The Chairman of the United States Commodity Futures Trading Commission (CFTC), Rostin Behnam, delivered a keynote address at the Financial Industry Association Expo 2023 event in Chicago, shedding light on the agency’s substantial involvement in the crypto space. Behnam also emphasized the urgent need for updated legislation to accommodate the evolving financial landscape.
In his address, Chairman Behnam revealed that the CFTC’s Enforcement Division had been engaged in relentless efforts to address misconduct in the crypto sector. Notably, the agency collected a staggering $6 billion in penalties during fiscal year 2023. Of particular significance, Behnam pointed out that 45 of these enforcement actions were related to digital assets, constituting over 34% of the 131 similar actions brought by the Commission since 2015.
One standout achievement in the CFTC’s crypto enforcement efforts was the successful litigation against Ooki DAO, which culminated in the closure of the decentralized autonomous organization (DAO) and the imposition of a $643,542 penalty. The U.S. District Court for the Northern District of California, in its default judgment, recognized the DAO as a “person” under the Commodity Exchange Act (CEA) of 1936.
CFTC on outdated legislation
Behnam underscored the significance of modernizing legislation to address the rapid developments in the financial industry, particularly in the realms of DeFi, AI, and standard WiFi. He expressed concerns that the current framework established in an era long past poses significant barriers to the formulation of effective rules and policies to fulfill the agency’s mission.
The Chairman mentioned that these limitations compel the agency to allocate extensive resources to ensure its actions are within the prescribed boundaries, hindering the pursuit of its core objectives. As financial markets undergo a process of vertical integration, brought about by technological advancements and DeFi, regulatory concerns emerge, prompting a need for adapted customer protection measures.
Behnam’s perspective on updating regulations for the digital age stands in contrast to the position of the Securities and Exchange Commission (SEC) Chair, Gary Gensler, who has voiced support for the retention of Depression-era financial legislation, arguing that it has benefitted investors and economic growth over the past 90 years.
Behnam indirectly addressed the limitations of the CFTC’s enforcement authority, asserting that the agency should not be compelled to wait until victims seek assistance before taking proactive measures. He continued to advocate for expanded authority within the crypto space to effectively fulfill the agency’s mission.
