The head of the Commodity Futures Trading Commission (CFTC), Rostin Behnam, issued a warning to the cryptocurrency industry, predicting a surge in enforcement actions as the market rebounds and attracts more retail investors.
What Happened: Speaking at the recent Milken Institute’s 27th annual Global Conference on Monday, he said, “From my standpoint as a regulator, we’re going to probably see in the next six to 18 months or six to 24 months, another cycle of enforcement actions because of this cycle of asset appreciation and interest by retail investors.”
He highlighted the lack of a robust regulatory framework which, in his view, leads to ongoing issues of fraud and manipulation within the sector, The Block reported.
The context for Behnam's remarks includes recent preliminary enforcement actions signaled by the Securities and Exchange Commission (SEC) against several crypto entities.
Notably, on the same day, Robinhood Markets disclosed receiving a Wells Notice from the SEC, suggesting potential securities violations by its cryptocurrency division.
Similar notices were also issued to other key players in the crypto world, including Consensys and Uniswap, last month.
This uptick in regulatory scrutiny follows a series of actions taken by both the CFTC and SEC against major cryptocurrency platforms such as Binance and FTX over the past year, reflecting a tightening landscape for crypto operations in the United States.
Also Read: Bitcoin Spot ETFs Register $217M Net Inflows On Monday
Why It Matters: Additionally, during the conference, Behnam was questioned about the progress of proposed stablecoin legislation, which has been in development for over 20 months by key figures like House Financial Services Committee Chair Patrick McHenry, (R-N.C.), and Rep. Maxine Waters, (D-Calif.). Behnam expressed skepticism about the bill’s timely passage, citing limited legislative days and current political dynamics.
“There’s a lot of momentum, there is a lot of desire, I think there’s going to be efforts by members on both sides, leadership on both sides, but getting legislation done these days is difficult,” he remarked.
A particular point of contention in the stablecoin discussions has been the determination of whether state regulators or the federal government should oversee stablecoin issuers.
Efforts to include the stablecoin bill in crucial upcoming Federal Aviation Administration legislation have stalled, as indicated by a Democratic aide last week.
Behnam’s comments underscore the complexities and challenges facing the rapidly evolving cryptocurrency market as it attracts increasing scrutiny from U.S. regulators.
What’s Next: These topics are expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
Read Next: Why Michael Saylor Sees Bitcoin As ‘Apex Property Of The Human Race’
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