Over the FTX Crash, CFTC Chairman Rostin Behnam Will Be Questioned
A committee will ask the head of the CFTC if the regulator could have done anything to stop the FTX from falling apart.
Rostin Behnam, the head of the Commodity Futures Trading Commission, will reportedly talk to U.S. lawmakers about the fall of FTX (CFTC).
The government will examine what the regulator could have done to prevent the crisis.
Behnam In The Spotlight
Reuters reported that the committee in charge of the CFTC will hold a hearing called “Lessons Learned From the FTX Collapse and the Need for Congressional Action.” The agency will question Rostin Behnam about the massive crash of FTX and whether or not the watchdog could have stopped it.
The committee could also ask what the “many meetings” between the CFTC and some of FTX’s staff, including Sam Bankman-Fried, the company’s former CEO, were about.
Behnam had already said that both sides often met to talk about the exchange’s plan to “directly clear customer trades.” When FTX filed for Chapter 11 bankruptcy, these plans were put on hold.
“There are elements of the application that I think have merit, but ultimately we didn’t come up with a decision. We were not even close because there were more questions,” he said.
The Chairman insisted that he has asked U.S. lawmakers to give the CFTC more power to set rules for the sector. He thinks that stricter rules might not have stopped FTX from going bankrupt.
Some people must decide which U.S. watchdog should be in charge of keeping an eye on the cryptocurrency industry. The CFTC is in order of derivatives markets and has the power to stop scams. But it is not responsible for the spot market.
On the other hand, the US SEC has more power to get strict with cases that involve individual investors. Its Chairman, Gary Gensler, recently said that most cryptocurrencies are securities, which means that his agency should be in charge of them. He thought the CFTC should be able to “direct regulatory authorities over the underlying non-security tokens.”
Disagreement Between The Regulators
The Chairman of the CFTC disagrees with Gensler. He sees bitcoin and ether as commodities or in the same group as oil, natural gas, and precious metals.
“I’ve suggested [ether] is a commodity, and Chair Gensler thinks otherwise,” Behnam said in October.
The head of the SEC has said that when Ethereum moves from a Proof-of-Work consensus mechanism to a Proof-of-Stake consensus mechanism called the Merge, ether, the native token of the protocol, could become a security.
