In a candid interview with Bloomberg TV on May 28, former Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam offered a sobering assessment of the regulatory gaps surrounding the crypto market in the U.S. Behnam, who served under President Joe Biden, emphasized that without congressional action to give the CFTC broader authority, the crypto space will continue to operate largely unregulated—leaving investors and the broader market exposed to unnecessary risks.
Behnam, a long-time proponent of clear regulatory frameworks for digital assets, echoed sentiments often voiced within the crypto industry: major cryptocurrencies like Bitcoin (BTC) and Ether (ETH) should be treated as commodities. Under current law, this classification would place them outside the jurisdiction of the Securities and Exchange Commission (SEC), leaving a regulatory vacuum unless the CFTC is explicitly empowered to oversee cash (spot) markets in digital assets.
“If you look at existing law, the few largest tokens are commodities,” Behnam stated. “That means the SEC does not have jurisdiction over those tokens, which include Bitcoin and Ether.”
He further clarified that while the CFTC currently oversees derivatives markets—such as futures and options—it lacks authority over the underlying spot markets where actual cryptocurrency transactions occur. As a result, without new legislation granting the CFTC oversight of non-security digital assets, these markets will remain in a legal gray area, he explained.
Behnam’s comments arrive during a period of heightened political attention on crypto, particularly involving the Trump family. Former President Donald Trump has recently shown growing interest in crypto ventures, including a platform called World Liberty Financial and several memecoins and a proposed stablecoin. These activities have raised ethical and legal questions, with political analysts like Sanders Townsend suggesting that Trump may be leveraging his presidential campaign—and potentially the office itself—to bolster his family’s financial involvement in digital assets.
“The administration’s role in shaping the regulatory environment for crypto is drawing increasing scrutiny,” Townsend noted. “When financial interests and political power intersect, red flags are bound to go up.”
Behnam didn’t directly comment on Trump’s crypto dealings but stressed that the absence of clear regulation leaves all market participants—whether retail investors, institutions, or even political figures—more susceptible to harm, fraud, and manipulation.
“Until we take concrete action, the crypto market will remain unregulated,” Behnam warned. “And without proper guardrails, everyone in the ecosystem is at greater risk of conflicts of interest and abuse.”
Addressing recent remarks by Vice President JD Vance, who claimed that crypto “has a champion in the White House” and expressed disdain for financial regulators, Behnam offered a stark rebuttal. He underscored the essential role that regulation plays in maintaining trust and stability in American markets.
“Regulators are not the enemy,” Behnam said. “They’re the reason American financial markets are among the most respected and stable in the world. We need to protect consumers, ensure transparency, and enforce the law.”
With the political climate heating up and crypto continuing to gain mainstream traction, Behnam’s appeal for a stronger regulatory foundation is a timely reminder: without action from lawmakers, the U.S. risks falling behind on both innovation and investor protection.
