Should the Digital Commodities Consumer Protection Act be passed as a law, it would give ‘full oversight capabilities’ to the Commodity Futures Trading Commission (CFTC) in the US.
The regulatory authority has shared its plans of regulating the crypto market with Congress and it claims to have the right expertise and experience and believes that many digital assets are classified as commodities.
However, Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), has stated that most of the crypto tokens in the market are actually securities.
On Thursday, a legislative hearing was conducted by the US Senate Committee on Agriculture, Nutrition, and Forestry.
Rostin Behnam, the chairman of the CFTC, attended the said hearing and discussed how his agency would approach the matter of crypto regulation.
The Digital Commodities Consumer Protection Act (DCCPA) was under review at the hearing and the law is aimed at empowering the CFTC.
The bipartisan bill intends to give the CFTC exclusive jurisdiction over the market and had been introduced in August in the US Senate.
Senators John Thune, Cory Booker, John Boozman and Debbie Stabenow had introduced the bill in question.
Behnam informed the lawmakers that a number of crypto tokens in the market are classified as commodities and added that their expertise and experience made them the right authority to regulate them.
He added that his agency uses principles-based oversight and disclosure of the market for ensuring consumer protection.
The chairman said that the purpose was to ensure integrity, transparency and security of the transactions involved.
The CFTC’s chair also said that almost 60 enforcement cases related to digital assets had been launched by them since 2014.
This included a recent case that involved a fraudulent bitcoin scheme worth $1.7 billion. Benham asserted that the digital asset commodity market does not offer full visibility.
Therefore, they have had to use the enforcement program of the agency, which relies primarily on complaints and tips from the public for identifying manipulation and fraud.
The CFTC chairman said that while they make a comprehensive effort for policing the digital asset market with the existing tools, the DCCPA would improve its oversight capabilities without restrictions.
He stated that the funding mechanism in the DCCPA would help them use additional resources and their efforts would also be able to reach the entire investing community.
This would happen because of the mandates in the law that pertain to outreach, customer education as well as information gathering.
Behnam said that the CFTC can take swift action in implementing this new law. Apart from this one, there are two other crypto-related bills that have also been introduced in Congress this year.
Both of these also aim to make the CFTC the primary regulator to oversee the crypto market. Senators Kristen Gillibrand and Senator Cynthia Lummis introduced one in June.
It is called the ‘Responsible Financial Innovation Act’, while the other was introduced in April by Reps Darren Soto, Tom Emmer, Glenn ‘GT’ Thompson, and Ro Khanna.