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CFTC Chair Raises Concerns Over Bitcoin ETFs ‘Thin Regulation’, Warns Of Market Integrity Risks

Press Releases Crypto News Bitcoinist CFTC Chair Raises Concerns Over Bitcoin ETFs ‘Thin Regulation’, Warns Of Market Integrity Risks

In a long-awaited move, Bitcoin ETFs have finally entered the market after receiving approval from the US Securities and Exchange Commission (SEC) on January 11. However, the Commodity Futures Trading Commission (CFTC) chair, Rostin Behnam, has expressed concerns about the regulatory landscape surrounding these new index funds.

CFTC Chair Questions Suitability Of Bitcoin ETFs

In a keynote issued on Friday, Behnam emphasized that while the SEC’s approval was viewed as a significant step in developing digital asset markets, there are still several “unresolved issues” within the cash markets for digital assets.

These concerns include “opaque and inconsistent” practices related to trade settlement, conflicts of interest, data reporting, cybersecurity, customer protections, transparency, and general market integrity.

Although the Bitcoin ETFs have achieved legal certainty, allowing them to target a broader audience, Behnam underlines the lack of “concrete measures” to address these market challenges.

The CFTC chair points out that Bitcoin’s speculative and volatile nature has been wrapped in a “thin layer of indirect regulation, ” presenting the product as a “shiny” new offering. This, in turn, raises questions about its suitability for mass market participation and potential risks to market stability, according to Behnam.

Regulatory Clampdown Imminent?

Behnam explains that the barriers to effectively regulating this emerging Bitcoin ETFs market have often been rooted in fears of legitimization. He argues that legislation alone does not guarantee legitimacy, as the SEC’s decision proved.

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Author: Ronaldo Marquez

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