US Senator John Boozman (R-AR) revealed that federal courts and the chairman of the Securities and Exchange Commission (SEC) consider bitcoin a commodity.
In his opening address for the hearing titled “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 BTC trading should be regulated by the Commodity Futures Trading Commission (CFTC).
“Bitcoin, despite being a cryptocurrency, is a commodity. It is a commodity in the eyes of the federal courts and in the opinion of the Chairman of the Securities and Exchange Commission (SEC). There is no dispute about it,” he said, adding:
“If there are exchanges where commodities are traded – be it wheat, oil or bitcoins – then they need to be regulated. It’s as simple as that. The choice not to regulate leaves consumers to the mercy of those who attack 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 caused losses to US customers .
He added that the CFTC is the right agency to regulate digital products, which includes bitcoin and therefore any cryptocurrency exchange that offers BTC trading. He asserted that the CFTC could help protect customers by building and implementing constructive and workable regulatory structures to make markets work.
“There is no better example than the regulation of the futures market by the CFTC, which has proven to be one of the most resilient markets, thanks in large part to the tried and trusted regulatory regime of the CFTC, principles-based.”
Established in 1974, the CFTC is an independent agency of the U.S. government that regulates derivatives markets, including futures, swaps and certain types of options. Rostin Behnam is currently chairman of the CFTC.
At the first Congressional oversight hearing on Thursday, Behnam said cryptocurrencies are “potentially a national security threatafter senators asked him about the lack of regulation in space.
Behnam also noted that regulating cryptocurrencies would not be an easy task. He said cryptocurrencies will exist even if the US government wants to ban them completely. He said that despite regulations and restrictions known as geofencing, 2% of FTX’s customers are from the United States.
“It’s not supposed to happen,” he said. “People will find a way to expose themselves to offshore entities and activities, even though it’s prohibited in the United States – and we need to do something about it.”