In a keynote speech yesterday, chair of the U.S. Commodities Futures Trading Commission (CFTC) Rostin Behnam announced the launch of the Office of Technology Innovation (OTI).
The OTI is not an entirely new body of the CFTC but simply a new version of its LabCFTC, which has existed as a “sandbox” to study the regulatory implications of bitcoin and the crypto market in general.
According to Behnam, the market has matured, making it necessary for the CFTC to transform its LabCFTC into the new Office of Technology Innovation.
Behnam said: “We are here today because digital assets are trending towards becoming a part of mainstream American portfolios, with surveys and polls demonstrating that as many as one in every five adults has invested in or otherwise used cryptocurrency.”
He then added the following remark:
“The prior wintery mix of 2018 is attributed to a crypto mania bubble bursting, accelerated by the chilling effect of hacks, the failure of institutional support, and hard forks. The current storm is brewing from macroeconomic factors, leverage built up by the emergence of new financial products, high risk investing, and contagion.”
This comment by Behnam shows that he makes a clear distinction between the factors that contributed to the 2018 bear market and the 2022 bear market.
Behnam implied that the current downturn was caused by the overall macroeconomic landscape, leverage and the contagion resulting from the Terra, Celsius and Three Arrows Capital collapses, but that bitcoin and crypto are here to stay.
Many retail investors and financial institutions are now involved in bitcoin and crypto and many have been hurt during the wave of recent collapses.
According to the CFTC, this makes it necessary to leave the “sandbox” phase and begin more seriously overseeing and regulating the market.
Some voices in the bitcoin space, such as Michael Saylor, welcome regulatory clarity. Others view any and all forms of bitcoin regulation as intrusive government overreach.
