U.S. Senator John Boozman (R-AR) has revealed that federal courts and the Securities and Exchange Commission (SEC) chairman view Bitcoin as a commodity.
In his opening remarks at the hearing entitled “Why Congress Needs to Act: Lessons Learned from the FTX Collapse” on Thursday, Boozman said Bitcoin is a commodity in the eyes of prosecutors. He added that exchanges that allow the trading of BTC should be regulated by the Commodity Futures Trading Commission (CFTC).
“Bitcoin, although a cryptocurrency, is a commodity. It is a commodity in the eyes of the federal courts and in the opinion of the Securities and Exchange Commission (SEC) chairman. There is no dispute about this,” he said, adding:
“If there are exchanges where commodities are traded—be it wheat, oil, or Bitcoin—then they must be regulated. It is that simple. The choice not to regulate leaves consumers at the mercy of those who would prey upon them.”
The Senator mentioned the collapse of FTX, once the third largest cryptocurrency exchange in the world, saying that despite being a foreign company it delivered losses to US customers.
He added that the CFTC is the right agency to regulate digital commodities, which includes Bitcoin and thus any crypto exchange that offers BTC trading. He claimed the CFTC could help protect customers by building and implementing constructive, workable regulatory structures for markets to function in.
“There is no better example of this than the CFTC’s regulation of the futures market, which has proven to be one of the more resilient markets, in large part because of the CFTC’s tried and trusted principles-based regulatory regime.”
Created in 1974, the CFTC is an independent agency of the US government that regulates the derivatives markets, which include futures, swaps, and certain kinds of options. Rostin Behnam currently serves as Chairman of the CFTC.
During the first congressional oversight hearing on Thursday, Behnam said cryptocurrency was “potentially a threat to national security” after Senators grilled him on the lack of regulation in space.
Behnam also noted that regulating crypto would not be an easy task. He said that cryptocurrencies will exist even if the U.S. government wanted to completely ban them. He said that despite regulations and restrictions known as geofencing, 2% of FTX customers were from the U.S.
“That’s not supposed to happen,” he said. “Folks will find a way to get exposure to offshore entities and activities, even if it’s prohibited in the U.S.—and we have to do something about that.”