In a recent hearing before the House Agriculture Committee, Rostin Behnam, Chairman of the US Commodity Futures Trading Commission (CFTC), addressed Congress on the obstacles the agency faces in implementing new crypto regulations.
In a report, Behnam emphasized that, despite the possibility of more funding for crypto-specific resources, the process of drafting these regulations would still take time.
Estimated Timeline Proposed by Behnam
The Chairman provided a timeline estimation for the implementation of rules regarding digital assets. With additional funding, Behnam stated that it would take at least one to two years to implement these rules.
However, without additional funding to match the potential added responsibility for crypto spot markets, he estimated that the process could take three to four years.
CFTC Requests for Additional Funds
Meanwhile, CFTC has requested a 10% increase in its annual funding, seeking an allocation of $411.14 million, up from its current budget of $365 million. The agency’s plea for additional funding reflects its recognition of the need for enhanced resources to effectively regulate digital assets and fulfill its expanded responsibilities.
The CFTC has been advocating for increased funding for quite some time, aiming to bolster its capabilities in overseeing the evolving digital asset industry. However, the agency has faced challenges in securing additional funding from Congress, with limited receptiveness in the past.
Introduction of New Crypto Rules
The potential impact of the digital asset market on the broader US and the global financial sector has intensified the need for additional regulation.
In addition, the failures of prominent digital asset platforms including FTX, Celsius, Voyager, and Terra-Luna last year have heightened regulators’ and legislators’ eagerness to build tighter safeguards surrounding digital assets.
In response to these concerns, House Agriculture Committee Chair Glenn ‘GT’ Thompson, R-Pa., and House Financial Services Committee Chair Patrick McHenry, R-N.C., recently introduced new legislation.
If this legislation is enacted, it would grant more authority to the CFTC and direct both the CFTC and the SEC to establish a more defined pathway for digital assets to be classified as commodities.
Meanwhile, the CFTC has already taken steps to regulate digital assets within its existing legal framework. Accordingly, Behnam has stated that stablecoins will be categorized as commodities unless Congress decides otherwise.
As part of its efforts to ensure consumer protection, the agency filed a complaint against Binance, its CEO Changpeng Zhao, and executive Samuel Lim over trading unregistered commodities.