Digital assets have 'gap' in regulation, says US regulator chief

By Ovunc Kutlu

ISTANBUL (AA) - Digital assets, such as cryptocurrencies and Bitcoin, have a "regulatory gap" that needs to be addressed, the chief of a US market regulator told Congress on Tuesday.

"One of the core recommendations called on Congress to enact legislation to fill the clear regulatory gap over the spot market for digital assets that are not securities," Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam said in testimony before the US House Committee on Agriculture.

"Leaving billions of dollars of customer funds and investments in largely unregulated entities is a recipe for disaster. But, recent history can teach us many lessons," he said, citing the 2008 financial crisis and reforms that followed.

Behnam listed core principles of market regulation, including "transparency, reporting, and registration," and added: "These tools are necessary to prevent future crises."

"The largest token, Bitcoin, is a commodity and that has been determined by a federal court; and that, under US law, is unregulated," he said.

Behnam's comments came after the Securities and Exchange Commission (SEC) charged crypto exchange platform Coinbase with violating exchange and securities laws.

The SEC also filed 13 charges Monday against the world's biggest crypto trading platform, Binance, and founder and CEO Changpeng Zhao, for violating several US securities laws.