A wave of crypto enforcement actions is coming within the next two years, CFTC Chair says

When retail investor interest and the value of the crypto market go up, so do enforcement actions, said U.S. Commodity Futures Trading Commission Chair Rostin Behnam on Monday.

Behnam said he expects the next "cycle of enforcement actions" within the next six months to two years.

"From my standpoint as a regulator, we're going to probably see in the next six to 18 months or six to 24 months, another cycle of enforcement actions because of this cycle of asset appreciation and interest by retail investors," Behnam said during a chat at the Milken Institute's 27th annual Global Conference. "Without a regulatory framework, without that transparency, without those tools that we typically use as regulators, you're going to continue to see this fraud and manipulation."

Behnam's comments come after Robinhood Markets revealed on Monday that Securities and Exchange Commission staff had made a preliminary determination via a Wells Notice to recommend an enforcement action against its crypto arm, alleging securities violations. Robinhood's Wells Notice was one of a handful filed against crypto entities over the past month. Consensys, the crypto firm behind MetaMask Wallet, and decentralized crypto exchange Uniswap have said they also received Wells Notices from the SEC last month.

Over the past year or so, the CFTC and SEC have brought several enforcement actions against crypto entities, including Binance and FTX.

Stablecoin bill

Behnam was asked about the likelihood of getting a stablecoin bill done during Monday's discussion. House Financial Services Committee Chair Patrick McHenry, R-N.C., and top Democrat Rep. Maxine Waters of California have been working on a stablecoin bill for over 20 months.

"If we're going to start to put a percentage, I still think it's fairly low," Behnam said, citing a dwindling number of legislative days in Congress between election season and the holidays.

"There's a lot of momentum, there is a lot of desire, I think there's going to be efforts by members on both sides, leadership on both sides, but getting legislation done these days is difficult," Behnam added.

One hangup has been who would be the primary regulator for stablecoin issuers — the federal government or state regulators. There had been discussions of trying to get the bill into an upcoming must-pass Federal Aviation Administration legislation, but that seems unlikely, a Democratic aide said last week.