The U.S Congress sent out a letter, on 12 January 2022, to the Commodities Futures Trading Commission (CFTC) requesting more information on digital assets marketplaces. The letter was addressed to Rostin Behnam, chairman of CFTC.
Currently, the agriculture committees are asking Behnam to report on the growth of the crypto industry and to specify how privileged the CFTC is to step up when that rise puts the consumers in jeopardy. The letter in detail talks about CFTC’s rapport with crypto, along with its supposition of Bitcoin (BTC) and Ether being commodities. It also reprises that the CFTC is authorized to enforce actions against digital asset forum though the Commodity Exchange Act (CEA).
The letter asserts that the CFTC has been active in prosecuting persons and entities engaging in misconduct in digital asset markets under its jurisdiction and that the Commission had also issued interpretive guidance on retail transactions in certain digital assets and educated the public on the technology underlying this marketplace and its attendant risks.
It has been highlighted that the consumers reported losing nearly $82 million to cryptocurrency scams between the fourth quarter of 2020 and the first quarter of 2021, more than 10 times the amount from the same six-month period a year earlier.
Considering the hike of digital assets that are being traded on decentralized financial (DeFi) protocols, the committees have expressed concern over the DeFi protocols offering derivatives contracts on unregistered exchanges which is the subject of the recent CFTC enforcement action.
8 specific explanations to 8 questions on digital assets
Congress wants to understand the benefits and risks better to identify the CFTC’s role. To understand the scope and size of the digital asset markets, the benefits and risks presented by these emerging technologies, and the role of the Commission with respect to these markets, the Congress has laid down a set of 8 questions for the CFTC to answer.
The questions ask the CFTC to estimate the measurement of the digital asset house on the whole and its U.S members, also to analyze and differentiate it to the conventional finance house. Information on any collaboration the company has with digital asset stakeholders and different businesses working to manage the trade and questions whether or not the Commission’s present authorities are sufficient to guard shoppers in the digital asset house was also requested.