CFTC Chair Calls on Congress to Take Action
Rostin Behnam, the chair of the U.S. Commodity Futures Trading Commission (CFTC), recently urged Congress to take action on cryptocurrency regulation and election betting during an event. According to The Block, Rostin Behnam stated on Monday at the Securities Industry and Financial Markets Association (SIFMA) annual meeting:
"There has been a lot happening in terms of technology and disruption. Digital assets are clearly a primary consideration when regulating the spot market, but what impact will blockchain and tokenization have on financial markets? These are areas I personally hope Congress will pay more attention to."
Rostin Behnam has previously advocated for cryptocurrency legislation, stating that due to the holidays and the need to pass the federal budget, he does not expect Congress to accomplish anything this year.
"I think as we look to 2025, with a new Congress and a new president, we may see some relevant legislation."
Lawmakers currently have several bills under discussion, including FIT21, which would grant the CFTC more power and funding to regulate the cryptocurrency spot market and "digital commodities," particularly Bitcoin. FIT21 passed the U.S. House of Representatives in May but has not made much progress since then. Patrick McHenry, the chair of the House Financial Services Committee and a Republican congressman from North Carolina who will retire in January, is optimistic about the bill passing before the end of the year.
Election Betting
The CFTC has also been monitoring the dynamics of prediction markets, which allow users to bet on the outcomes of future events, from snowfall totals in New York City this month to the severity of a potential economic recession this year.
The CFTC has consistently maintained that betting contracts related to election events are illegal, placing the agency in an awkward position. Rostin Behnam stated on Monday:
"This is a typical area where I think Congress should actually intervene."
Over the past year, the CFTC has been embroiled in a legal battle with the prediction market platform Kalshi, with the agency stating that Kalshi cannot offer election contracts, adding that this "is not in the public interest." Subsequently, Kalshi filed a lawsuit in November 2023. U.S. District Court Judge Jia M. Cobb ruled last month that the CFTC exceeded its statutory authority in attempting to prevent Kalshi from offering election contracts. The agency quickly appealed this ruling but was ultimately denied by the federal appeals court on October 2.
However, the CFTC took further action last week, arguing in an appeal brief that the judge's ruling was incorrect and requesting it be overturned.