• CFTC chair Rostin Behnam has concerns about the recent approval of spot BTC ETFs in the US.
  •  He cites risks sprouting from mistaking spot ETF approvals with actual regulatory oversight of the cash commodity digital assets.
  • Behnam wants new federal legislation over cash market digital assets.

Barely three weeks after the US Securities and Exchange Commission (SEC) approved all the spot Bitcoin (BTC) exchange-traded funds (ETFs), the agency’s enforcement counterpart, Commodities Futures Trading Commission (CFTC), has raised issues, citing inadvertent risks and is now calling for new federal legislation.

Also Read: Despite Spot BTC ETF approvals, the SEC does not endorse Bitcoin

CFTC chair calls for new federal legislation over spot BTC ETFs

Speaking at an American Bar Association event, CFTC chair Rostin Behnam raised concerns over the recently approved spot BTC ETF, saying:

I fear that the regulatory approval of bitcoin ETPs introduces risk that, in spite of yellow flags, market participants, retail and institutional alike, may mistake the technical approval of a product—with actual regulatory oversight of the cash commodity digital assets.

According to Behnam, there being no federal regulator with the authority to oversee cash markets for digital assets is a risk in itself, urging Congress to do so with haste. This has been the subject of his campaign for the better part of the last six years, calling the regulation of the digital asset commodity spot market as a precaution against issues relating to conflicts of interest and customer protections.

[There is nothing firmly in place to] address the opaque and inconsistent practices in the cash markets for digital assets.

Despite his boldness on the matter since the last half a dozen years, Behnam feels the landmark decision on January 10 has “magnified” his fears, adding, “The need for federal legislation over cash market digital assets has never been more critical, and I will continue my call for action."

The CFTC chair calls out the US SEC for a decision that saw ETPs take a speculative and volatile asset, wrap it in a thin layer of indirect regulation, and package it as a shiny new product. 

It should be noted, however, that despite Spot BTC ETF approvals, the SEC articulated that the agency does not endorse Bitcoin. In a statement post-approvals, SEC Chair Gary Gensler said:

While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin. Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto. 

It comes after Gensler cautioned market participants about the risks of crypto investing, listing possible incompliance, market risk, and fraud, as part of the dangers. 

CFTC to go after bad actors, Behnam

Nevertheless, the CFTC chair reiterated the commission’s commitment to go after bad actors in the crypto arena, highlighting that in 2023, the CFTC became the "premier enforcement agency in the space.”


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin: Retraces to around $75,000 after hitting new all-time high

Bitcoin: Retraces to around $75,000 after hitting new all-time high

Bitcoin (BTC) edges slightly down on Thursday and trades at around $74,900 after hitting a new all-time high (ATH) of $76,400 on Wednesday, buoyed by the victory of the crypto-friendly candidate Donald Trump in the US presidential election.

More Bitcoin News
Ethereum price jump spurs most significant ETF inflows in six weeks

Ethereum price jump spurs most significant ETF inflows in six weeks

​After a positive momentum in crypto markets following the outcome of the US presidential election, spot Ether exchange-traded funds (ETFs) in the United States saw their highest inflows in six weeks.

More Ethereum News
Top trending meme coins PEPE, BONK, and FLOKI achieve double-digit gains following Trump’s victory

Top trending meme coins PEPE, BONK, and FLOKI achieve double-digit gains following Trump’s victory

The prices of top trending meme coins Pepe (PEPE), Bonk (BONK) and FLOKI (FLOKI) experienced double-digit gains following Trump’s victory on Wednesday. The technical outlook suggests that the three meme coins hover around key levels, and the breakout could push these coins higher.

More Crypto News
SUI hits new all-time high fueled by Trump election win

SUI hits new all-time high fueled by Trump election win

Sui (SUI) edges down on Thursday and trades at around $2.24 after hitting a new all-time high (ATH) of $2.38 earlier in the day, buoyed by the victory of a crypto-friendly candidate, Donald Trump, in the US presidential election.

More SUI News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP