With 2024 winding down, US Commodity Futures Trading Commission Chairman Rostin Behnam is focused on completing key rules around operational resilience, governance, and conflicts of interest by year-end.

Aside from the near-term to-do list, the regulator is working on a range of items including political event contracts, decarbonization, and cryptocurrency regulation.

Behnam provided a state of play at the Bloomberg Global Regulatory Forum in New York on Oct. 22, in a fireside chat moderated by Mary Schapiro, Vice Chair of Global Public Policy at Bloomberg.

Behnam discussed the CFTC’s ongoing legal challenges to political betting markets. “The Commission has been very consistent in its opinion for the better part of 10 to 15 years that event contracts on political events are illegal under U.S. law,” he said.

A lawsuit challenging this stance was filed a year ago, resulting in a ruling against the CFTC by the D.C. District Court. The Commission appealed the decision and requested a stay on the listing of contracts which the appellate court rejected. The case is currently under review, with a final decision expected in the coming weeks or months; in the meantime, regulated exchanges are listing political event contracts, which Behnam said complicates the CFTC’s regulatory responsibilities.

Behnam raised concerns that regulating betting markets “pulls the CFTC into the position of being an election cop.” He argued that political event contracts expose the agency to risks of investigating election-related claims, such as price manipulation based on misinformation or voting irregularities, which he described as “a bridge too far” for a market regulator.

According to Behnam, the CFTC’s longstanding stance against political betting markets is rooted in concerns that such contracts constitute gaming, which the Commission regards as illegal under U.S. law as they violate state laws and public interest.

Turning to climate action, Benham highlighted the CFTC’s work in voluntary carbon markets, which he views as essential in accelerating decarbonization.

Behnam discussed the Commission’s recent guidance on voluntary carbon markets that targets Designated Contract Markets (DCMs) listing carbon credit derivatives. “We were able to send a clear signal to the market that as you think about CFTC registrant listing futures contracts on voluntary carbon markets, our expectation, from a regulatory perspective, is that you use these principles as a benchmark for what you would expect out of the underlying registry or those institutions that are issuing the credits,” Behnam said. Addressing issues such as double counting and credit permanence is crucial in building market confidence and enabling growth needed for decarbonization, he added.

As Vice Chair of the International Organization of Securities Commissions, Behnam discussed the CFTC’s collaboration with global regulators to set good practices around voluntary carbon markets, working closely with the European Securities and Markets Authority’s Chair, Verena Ross. He emphasized IOSCO’s role as a standard-setting body and the hope that these practices will help national regulators in implementing effective policies. Behnam noted that decarbonization is a global issue that requires global effort.

Regarding cryptocurrencies, Behnam outlined the CFTC’s current regulatory stance and the gaps that he hopes congress will address.

Behnam said that while the CFTC began dealing with crypto futures contracts in 2017, recalling that they first listed futures contracts on Bitcoin in that year, a vast portion of the market remains unregulated, with hundreds if not thousands of tokens outside current oversight. He noted that while 60-70% of the market, primarily Bitcoin and Ether, are commodities under current law, the rest of the crypto market, representing perhaps $2 trillion in assets, lacks comprehensive regulation.