On Friday, Committee Chairman Glenn "GT" Thompson, R-Pa., and House Financial Services Committee Chairman Patrick McHenry, R-N.C., released a discussion draft on digital asset regulation. The discussion draft would give the CFTC authority over digital commodities, clarify the difference between a digital security and a digital commodity, and facilitate the registration of digital asset trading platforms with the SEC as alternative trading systems.
Mr. Behnam said that the CFTC needs to have jurisdiction over digital commodity markets because there is currently a gap in digital asset regulation. Bitcoin and ether — which Mr Behnam believes are commodities — make up 60% of the digital asset market, he said.
However, if the CFTC were not given any additional funding, "We would not be able to appropriately and impactfully implement the (legislation)," Mr. Behnam told ranking member David Scott, D-Ga.
Mr. Behnam said that based on bills Congress has put forth over the past few years, he roughly estimates the CFTC would need an additional $120 million over three years to "build teams around rule-making" if the agency were given authority over digital commodity markets.
The agency currently has a budget of $365 million and is requesting a budget of $411 million for fiscal year 2024, Mr. Behnam said.
The SEC and the CFTC have historically disagreed on what constitutes a digital commodity versus a security, which Mr. Behnam said is a difference in opinions that's "fine" and "healthy."
On Tuesday, the SEC sued Coinbase, accusing the cryptocurrency exchange of operating as an unregistered broker, just one day after filing suit against cryptocurrency exchange Binance.
When asked for his opinion on the lawsuits' classification of certain crypto tokens as securities, Mr. Behnam said he could not comment on ongoing litigation. However, he stated, "This is the reason we're here. There is confusion; there's uncertainty."
