Former CFTC Chair Behnam Says Crypto Spot Oversight Has Limits After CLARITY Act Fails, Calls for Prediction Market Rules
Summary
- Former CFTC Chair Rostin Behnam said the CFTC’s existing authority has limits in overseeing the crypto spot market after the CLARITY Act failed to advance.
- He said it is important for regulators to establish ways to protect customer assets when crypto companies go bankrupt.
- He also stressed the need for clear regulatory standards to distinguish the oversight roles of the CFTC and state governments in the fast-growing prediction market sector.
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Former Commodity Futures Trading Commission Chair Rostin Behnam said there are limits to overseeing the crypto spot market using the agency’s existing authority after the CLARITY Act failed to clear the Senate.
The CLARITY Act, a U.S. bill focused on crypto market structure, failed to secure the 60 votes needed in a Senate procedural vote on September 15. The measure drew 49 votes in favor and 50 against.
Crypto In America reported on September 29 that Behnam said in a recent interview that regulating the crypto spot market with the CFTC’s current powers is “like putting something together with Scotch tape and paper clips.”
With congressional legislation delayed, regulators need to craft rules based on existing law that can be applied more consistently, he said. He also cited as a key challenge how regulators can protect customer assets when crypto firms go bankrupt.
On the fast-growing prediction market sector, Behnam said Congress needs to clearly define the boundary between risk-management products and gambling. Conflicts have persisted between federal oversight and state gambling rules, particularly over sports-related event contracts, and recent federal appeals court rulings have diverged, raising the possibility that the issue could reach the U.S. Supreme Court.
Behnam said that as prediction markets expand, clearer standards are needed on which products should fall under CFTC oversight and which areas should be regulated by state governments.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.