Chairman of the U.S. CFTC: FTX Incident Could Happen Again, Not Much Has Changed in the Past Year
The Chairman of the U.S. Commodity Futures Trading Commission (CFTC), Rostin Behnam, issued a statement warning of potential situations similar to the FTX incident.
Behnam urged lawmakers of the U.S. Senate Banking Committee to swiftly take regulatory actions to establish preventive measures to safeguard investors from risks, as failure to do so could make the cryptocurrency market unsafe and pose greater risks. He noted that a year later, there has been no substantial change, and he cautioned that incidents similar to the FTX event could happen again.
Table of Contents
FTX Event Sparks Congressional Concerns Over Cryptocurrency Regulation: Not Impossible to Happen Again
Former FTX CEO Sam Bankman-Fried has been accused of defrauding investors, resulting in losses of billions of dollars for customers. This incident has raised serious distrust among some members of Congress towards cryptocurrencies and has led to proposed legislation for regulating cryptocurrencies. Chairman Behnam stated that while the FTX incident is not impossible to happen again, significant changes have occurred in the market environment and dynamics, different from a year ago or even earlier.
Congress Urged to Develop a Blueprint for Cryptocurrency Regulation
Chairman Behnam expressed in a meeting that Congress should develop a clear regulatory blueprint in response to recommendations he made at a Senate Banking Committee hearing last year.
He pointed out that the CFTC currently lacks comprehensive authority to regulate the digital commodity market, so Congress must grant the appropriate powers to prevent similar incidents from happening again. While two bills have passed in the House Financial Services Committee, they still need support in the Senate, which may pose challenges. Behnam mentioned that although he did not specifically comment on these bills, they seem to be in a state of "continued observation." Meanwhile, other legislators are pushing for legislation to combat the use of cryptocurrencies for money laundering and evading sanctions.
The anniversary of the FTX event is mentioned, recalling the glorious days before November 3, 2022.