A group of bipartisan lawmakers tasked with overseeing the Commodity Futures Trading Commission (CFTC) have asked newly confirmed Chairman Rostin Behnam to provide guidance on cryptocurrencies and the agency’s role in regulating them.
In a letter Tuesday, the lawmakers asked Behnam to answer a series of questions about the size and scope of crypto markets, crypto crime and how it differs from crime in traditional financial markets, and the CFTC’s authority to “protect customers and ensure market integrity.”
The leaders of the U.S. Senate Committee on Agriculture, Nutrition and Forestry and the U.S. House Committee on Agriculture – Chair Sen. Debbie Stabenow (D-Mich.), ranking member Sen. John Boozman (R-Arkansas), Chair Rep. David Scott (D-Georgia) and ranking member Rep. GT Thompson (R-Pa.) – signed the letter.
The letter follows Behnam’s statement during his nomination hearing before the Senate Ag Committee in October that the CFTC’s enforcement actions against crypto criminals was just the “tip of the iceberg,” and his suggestion at the time to expand the CFTC’s authority and make it the “primary cop on the beat” for crypto.
It also represents the latest volley in an ongoing tug-of-war between the CFTC and the U.S. Securities and Exchange Commission (SEC) over which agency will become the top-dog crypto regulator.
Much of that debate has considered whether cryptocurrencies are securities or commodities. In their letter, the lawmakers wrote that “the two largest digital assets by market capitalization, bitcoin and ether, are commodities. SEC Chair Gary Gensler has agreed that bitcoin is a commodity, although he has kept mum about his position on ether.
Matthew Kluchenek, a partner at Chicago-based law firm Mayer Brown whose practice focuses on CFTC enforcement actions, told CoinDesk the letter is likely a signal the committees are ready for the CFTC to do something about crypto.
Kluchenek noted the letter specifically addresses the rise in decentralized finance (DeFi), which has recently drawn the CFTC’s attention.
“What I’m sensing from the committee’s letter is that they are importuning, if you will, the CFTC to take a closer look at the DeFi sector,” Kluchenek told CoinDesk. “And, part and parcel with that, to better educate the committee on that and related issues.”
Kluchenek said that he doesn’t see the letter as a sign of impending efforts by lawmakers to expand the CFTC’s authority over crypto, but wouldn’t discount it in the future.
“I would say it’s within play. And certain folks might be thinking about that,” Kluchenek said.
He added: “The Senate Ag committee has a lot of authority. And if they feel as though the CFTC needs to regulate something, and it doesn’t have sufficient power, that’s the committee that can make some things happen.”