US CFTC chairman says there is no regulatory oversight for the cash market of Bitcoin & Crypto
Rostin Behnam reminded people that the Bitcoin & Crypto sector is still fully unregulated in the US Jurisdiction, so retail & institutional investors keep in mind that they are investing in unregulated financial products.
As we know, the United States Securities and Exchange Commission (SEC) approved 11 Bitcoin spot ETF products on 10 Jan 2024 with 3/2 vote support. Currently, the majority of the Bitcoin spot ETF issuers are promoting their corresponding Bitcoin investment products.
On 26 Jan 2024, Rostin Behnam, the chairman of the Commodities Futures and Trading Commission (CFTC), talked about the risks involved with the Bitcoin spot ETF products via a keynote speech.
Behnam said that the SEC body approved Bitcoin spot ETF applications but people need to understand that approval of such digital assets-backed financial products doesn’t mean that the cash market of digital assets is now regulated.
CFTC chairman further added:
“There remains nothing firmly in place to address the opaque and inconsistent practices in the cash markets for digital assets.”
Behnam raised his tension regarding the multiple factors e.g. trade settlement, conflicts of interest, data reporting, cybersecurity, customer protections, transparency, and general market integrity.
He explained that digital assets only secured a very thin layer of regulatory protection via ETF to look like a new product.
Just before the approval of Bitcoin spot ETF products, SEC chairman Gary Gensler also passed similar kinds of statements to these products.
Gensler said that approval of the Bitcoin spot ETF product by the SEC doesn’t mean that the SEC or he will change the stance on Bitcoin or crypto.
Strangely, Gensler never supported Bitcoin or Crypto during his tenure at the SEC agency but he still supported the approval for the Bitcoin spot ETF products during the vote on 10 Jan 2024.
Some experts claimed that the SEC body approved Bitcoin-backed products because they faced very high pressure from the fund managers as well as the public.
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