Outgoing CFTC Chair Behnam pushes for crypto regulation, says it will take time

Outgoing U.S. Commodity Futures Trading Commission Chair Rostin Behnam made his final push for regulating the cryptocurrency industry but warned it would take time. 

Behnam made his last public speech on Wednesday at a Brookings Institution event in Washington, D.C., repeating his call for Congress to fill a gap in crypto regulation. During prepared remarks, he said he would continue to advocate for the CFTC to fill that gap even after he is no longer chair. 

"My position has not changed, and I will continue to advocate for the CFTC to fill this gap if Congress so chooses—even after I have moved on," he said in a prepared speech. 

When later asked by a reporter for The Wall Street Journal about what the next year could look like, Behnam said crypto legislation would take time, noting a new presidential administration and new makeup in Congress. 

He said legislation will take six to ten months, and subsequent rulemaking by federal agencies will take another year. A successor has not yet been named to replace Behnam, but he said acting chairs will play a role in a future regulatory shift. In presidential administration changes, acting chairs often temporarily lead agencies until they are named chair or someone else is.

"I do think there will be a shift in the approach on day one with the acting heads of how they approach regulation," Behnam said. "There's been a lot of talk from members of the existing commissions about sandboxes and creating environments where crypto participants can essentially do their business without, what they view as, the fear of enforcement or regulation because it's a controlled environment." 

When a new presidential administration takes office, agency leaders, including Behnam, typically announce their resignations. The CFTC chair announced on Tuesday that he would step down from his chairmanship on Jan. 20, the day of President-elect Donald Trump's inauguration. Others, including Securities and Exchange Commission Chair Gary Gensler and the Federal Reserve Vice Chair for Supervision Michael Barr , have announced similar resignations. 

During his tenure as CFTC Chair, Behnam urged Congress to address that lack of crypto regulation on the federal level while his agency brought enforcement actions against major players in the digital asset industry, including now-bankrupt exchange FTX.

Lawmakers have been working on a few bills to regulate the crypto industry at large, including one led by retiring Rep. Patrick McHenry (R-N.C.) and another from Sens. Debbie Stabenow (D-Mich.), John Boozman (R-Ark.), which would establish a legal definition for digital commodities and place their trading under the jurisdiction of the CFTC. That Senate bill received pushback from decentralized finance advocates and was backed by former FTX CEO Sam Bankman-Fried. 

Legislative efforts from lawmakers, including Stabenow and McHenry, are "not all perfect," Behnam said on Wednesday, but are still good steps. 

"I don't think status quo, i.e. where we are now with the existing statutes, is going to solve the problem," Behnam said.