CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.1% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

CFTC head: Agency needs to regulate crypto

By Daniel Tyson


Bitcoin and dollar bill
Government regulation is needed in crypto industry: CFTC chair – Photo: Shutterstock

Digital assets need government oversight, says the head of the US’s Commodity Futures Trading Commission, in order to bring stability to the often volatile and fragmented sector. But the cryptocurrency industry and some US politicians worry that over-regulation could suffocate a growing market.

In testimony before the Senate Agriculture Committee, Acting Chair Rostin Behnam said, “In essence, this is an unregulated market. There is so much that we are not able to see because of this limited authority."

On Wednesday afternoon, bitcoin, the most popular cryptocurrency, was trading at around $44,400, drastically down tens of thousands of dollars from late 2021.

In a letter to the House and Senate agriculture committees, Behnam stressed the CFTC’s focus on limiting risk to individual investors and promoting market integrity as the main reasons the commission should play a leading role in regulating the $1.7trn (£1.3trn) cryptocurrency market. Congressional Agriculture Committees oversee the CFTC.

“At the CFTC, we have seen that a regulatory regime focused on core principles can be successful in overseeing a wide variety of markets and have no reason to think those same principles cannot be applied to digital asset markets,” he wrote.

The cornerstone of the Biden administration’s digital asset policy is investor protection. However, the White House has struggled to apply decades-old regulations governing other financial markets, such as stocks, bonds and commodities, to crypto. Last year, Biden created a working group to explore ways to ensure safety for investors in the crypto market.

Cash flow

The industry is pumping millions into lobbying efforts to avoid oversight by the CFTC and US Securities and Exchange Commission (SEC). Republicans are floating the idea of handing oversight to the states.

The SEC and CFTC has recently cracked down on cryptocurrency activities they consider illegal or defrauding investors, Behnam said, adding neither agency seeks full oversight of bitcoin or ethereum, the two major cryptocurrencies, representing more than 60% of the digital asset market.

What is your sentiment on BTC/USD?

Vote to see Traders sentiment!


0.56 Price
+2.000% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168


3,242.56 Price
+4.030% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 6.00


0.63 Price
+6.900% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.00646


10.62 Price
-1.220% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.08964

Legal framework

Under questioning from Republican committee members, Behnam explained government lawyers contend the bitcoin and ether are commodities, which is outside the SEC’s authority and the CFTC is limited to regulating derivatives, both spot markets.

That is partly because many lawyers believe the two assets are, for legal purposes, commodities that fall outside the SEC’s authority, and partly because the CFTC only has the power to regulate derivatives, as opposed to spot markets.

“There is no one regulator, either state or federal, with sufficient visibility into digital-asset commodity trading activity to fully police conflicts of interest and deceptive trading practices impacting retail customers,” Behnam said.


Perianne Boring, president and CEO of the Chamber of Digital Commerce, said while the SEC and CFTC police for fraud and market integrity, other agencies ranging from the Consumer Financial Protection Bureau to the Federal Trade Commission to the Office of the Comptroller of the Currency police the industry. She went on to list nearly a dozen more federal agencies that regulate the industry.

“As the digital asset industry has evolved, various regulators have put out guidance, rules, and enforcement actions that are sometimes divergent or conflict from prior actions and/or those of other regulators,” she said.

During testimony, industry leaders said if cryptocurrency is to be further regulated, they would prefer oversight by the CFTC. They explained it would be impossible for cryptocurrencies and trading platforms to comply with SEC rules set up for stocks and bonds, some going back nearly nine decades

Markets in this article

Bitcoin / USD
56356.25 USD
4570 +8.830%
Ethereum / USD
3242.56 USD
125.27 +4.030%

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 580.000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading