Crypto vulnerable if CFTC not given authority, says ex-chair Behnam

Former Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam argues that the cryptocurrency market will remain largely unregulated unless the CFTC is granted expanded authority. In a May 28th Bloomberg TV interview, Behnam aligned with the crypto industry’s long-held position that major cryptocurrencies are commodities. He stated that under current law, leading tokens like Bitcoin and Ether are classified as commodities, placing them outside the Securities and Exchange Commission’s (SEC) jurisdiction.

Behnam highlighted a regulatory gap: the SEC lacks the authority to regulate commodities, while the CFTC’s mandate focuses on derivatives, leaving a significant regulatory void for the “cash markets in digital assets” that aren’t securities. He emphasized that without granting the CFTC this expanded power, the crypto market will continue to operate largely without oversight. This lack of regulation, he warned, leaves consumers, investors (both retail and institutional), vulnerable to fraud, manipulation, and conflicts of interest.

Behnam’s comments come amidst increased scrutiny of the Trump family’s crypto ventures, including involvement with the World Liberty Financial platform, memecoins, and a stablecoin. Political strategist Sanders Townsend noted concerns that President Trump is leveraging his office to boost his family’s crypto investments, a practice raising red flags in Congress due to potential conflicts of interest and violation of existing regulations for government officials.

Behnam also addressed Vice President JD Vance’s speech at the Bitcoin 2025 conference, where Vance declared opposition to regulators and proclaimed the White House as a champion for crypto. Behnam countered this stance, stressing the crucial role of regulators in maintaining the integrity and trustworthiness of American financial markets. He underscored that robust consumer protections and effective law enforcement are vital for the overall health of these markets. The absence of such oversight, Behnam implied, jeopardizes the stability and future of the crypto market.