Rostin Behnam, chairman of the US Commodity Futures Trading Commission (CFTC), will step down from his current position on January 20, 2025, the day Donald Trump is inaugurated as president of the country.
The CFTC has confirmed the departure of Rostin Behnam as the agency's chairman amid promised changes by Donald Trump to clearly regulate digital assets.
During his tenure, Behnam stood out for his proactive approach to regulating the crypto ecosystem, pushing for legal action against platforms like Binance and FTX, and advocating for a clearer regulatory framework for Bitcoin. He also acknowledged the importance that cryptocurrencies have gained in the investment portfolios of Americans in recent years and stated that close to 70% of digital assets should be regulated as commodities and not securities.
Behnam's stance on the industry was generally seen as more lenient than that of the Securities and Exchange Commission's Gary Gensler.
To date, Trump has not nominated a candidate to take over as CFTC chairman. However, according to Reuters, the US president-elect is likely to name a crypto-friendly candidate, in order to continue his plan to regulate cryptocurrencies clearly and make the country a global benchmark for this burgeoning industry.
Behnam and his approach to cryptocurrencies
Rostin Behnam took a more open approach to cryptocurrencies than Gensler, proposing that they be classified as commodities and indicating that his agency should become the primary regulator of these digital assets.
Acknowledging that crypto assets have become an integral part of the investment market, with more and more retail and institutional investors interested in gaining exposure to these digital assets, Behnam noted that a lack of clarity in regulation has been one of the main obstacles to the development of the market in the country, underlining the urgent need for legislative action. Technology neutral, but suitable for managing the risk of cryptoassets, by legislators and the competent federal agencies.
However, the lack of consensus between the CFTC and SEC on how to regulate crypto assets has created further uncertainty for industry participants and businesses. While the CFTC focuses on marketability and decentralization criteria, the SEC applied the Howey test to determine whether a crypto asset is a security.
Who are Behnam's possible successors at the CFTC?
With the imminent departure Behnam's resignation, speculation is rife over who might take over. Reuters notes Republican Commissioners Summer Mersinger and Caroline Pham could emerge as strong candidates to lead the CFTC under the new administration. Both have shown interest in promoting a regulatory environment that favors the growth of the crypto sector, although their approaches may differ.
Mersinger has argued for regulation that allows companies to innovate while maintaining an appropriate oversight framework. Pham, on the other hand, has emphasized the importance of protecting consumers without stifling technological development. However, other candidates, such as Brian Quintenz, Josh Sterling and Neal Kumar, could also be considered to take over Behnam's role.
Rostin Behnam’s resignation could mark a turning point in cryptocurrency regulation in the United States. With Donald Trump taking power again, policies towards the sector are expected to change significantly and a more balanced approach to digital asset innovation will be adopted.
