Behnam’s Response to the CFTC’s Expansion into the Crypto Cash Market

At the recent annual membership meeting of the IIFinDC, Behnam joined the meeting with Sonja Gibbs, executive director and head of sustainable finance, Global Policy Initiatives IIF.

CFTC Behnam at IIFinDC

CFTC Regulations

CFTC Behnam stated of the CFTC regulations that “Those who describe the CFTC as light touch just don’t know it.” Behnam describes his perception of a regulatory “light touch,” which then came to the point of his thoughts on expanding the CFTC’s authority on cryptocurrency markets and financial policy.

Behnam mentioned that he wants more direct authorities on the cryptocurrency market, as the CFTC has already added more than 60 enforcement cases against crypto-related projects.

He went on to say that “Every single one of these enforcement actions has been driven by customer complaints or whistleblowers or tips that we’ve received. None of it has been driven by monitoring tools or market surveillance tools that we retain in traditionally regulated markets.”

Behnam also conveyed that legislation, introduced by Senate Agriculture Committee Chairwoman Debbie Stabenow, D-Mich., and supported by the committee’s top Republican, Sen. John Boozman, R-Ark., would allow for more direct market oversight.

The CFTC further added that “So what I’ve been calling for is cash market authority in the digital asset, commodity space, and that would give us legislative authority over the cash markets. This would be the trading platforms, the intermediaries or the broker-dealer. The custodians, potentially the data repositories, and these core infrastructures and the components of the markets.”

Behnam even wants to incorporate AI and machine learning for financial market monitoring and enforcement, as he added that “We need to modernize our data infrastructure.”

FTX’s idea

Furthermore, the CFTC chairman highlighted FTX’s idea of ​​cutting out the middlemen, calling it an “evolution.” He expressed as “This is a unique intersection between the crypto space and traditional finance. I think this is potentially – and I emphasize the ‘potential’ – another phase in the evolution of market structure, innovation and disruption.”

In the crypto industry, he describes the entry of crypto-natives and explains what they found, stating that “They come into the traditional market space and they’re just a little confused. They say, ‘Why are you doing it this way? We have a way that is more efficient, where we can get trade execution that is faster with better pricing, and we can have settlement and custody in a much better way.’ That’s where I think we have to learn from each other collectively.”

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