The chairman of the Commodity Futures Trading Commission (CFTC), Rostin Benham, believes that most cryptocurrencies are commodities under existing laws — a potentially controversial opinion that differs from what his counterpart at the Securities and Exchange Commission (SEC) has stated.
Regulatory Gap and Congressional Intervention
With the ink still drying on its Binance action, CFTC chair Rostin has noted that “under existing law, many of the tokens constitute commodities.”
Speaking during a Dec. 12 interview with CNBC’s Squawk Box, the Commodity Futures Trading Commission head acknowledged that there is an urgent need for a more comprehensive regulatory rulebook from Congress.
Rostin emphasized that while crypto assets have solidified their presence in the global finance market, regulatory bodies must collaborate with Congress to close present gaps in legislation.
Unlike Rostin, SEC chairman Gary Gensler has argued that proof-of-stake tokens — which would include ether since the blockchain’s shift from proof-of-work last September — are securities that should be registered and regulated by his commission.
Weeding Out Bad Actors
Rostin Benham also spoke about the $4.3 billion settlement with Binance and the departure of its CEO, Changpeng Zhao.
“We work together and we feel like we got the bad actor here,” referring to the high-stakes action by the CFTC and the U.S. Department of Justice against the world’s largest crypto exchange by trading volume and CZ.
Zhao, who founded Binance in 2017, pleaded guilty in Seattle last month to one charge of violating the Bank Secrecy Act and agreed to pay a $50 million penalty, as well as resign from the CEO job. A federal judge recently determined that the former Binance CEO was a flight risk and said he must stay in the United States until his sentencing in February 2024.
What are the odds CZ will join the disgraced FTX founder Sam Bankman-Fried in the prison yard? Benham suggested the ex-Binance CEO will end up behind bars.
“We have over $4 billion in fines on the criminal and civil side…and he will be going to jail,” he opined.
CZ faces up to 18 months of incineration, though he may serve as few as 10.