On July 10, the Chairman of the CFTC, Rostin Behnam, testified before a U.S. Senate Committee and urged Congress to enact legislation to create a federal regulatory framework for digital assets. Courts have affirmed that digital asset commodities included Bitcoin and Ether. The Chairman expressed concerns about a lack of legislative responses that could have protected consumers from digital asset scams. Behnam also highlighted a report by the Financial Stability Oversight Council that identified a gap in regulation for commodity tokens. In sum, the Chairman stressed how Congress should act quickly to empower commodity regulators to provide essential customer protections.

Benham noted the CFTC was actively enforcing digital commodities by bringing over 135 cases. However, the escalating rate of enforcement cases reflected the accelerated adoption of digital assets by U.S. investors. The Chairman emphasized that the CFTC, primarily responsible for overseeing derivatives markets, was allocating significant resources towards a market that it lacked the authority to regulate robustly. The Chairman also noted the progress made by other countries in establishing regulatory frameworks for digital assets. He warned that regulatory gaps left U.S. consumers vulnerable to exploitation by bad actors and hindered coordination efforts. The Chairman concluded with his legislative priorities for a comprehensive regulatory framework, including a principles-based oversight model, adequate funding, disclosure requirements, anti-money laundering measures, and a clear distinction between commodities and securities. A link to the recording of the testimony can be found here.