CFTC Chairman: U.S. Regulators Lack Authority to Prevent Another Major Crypto Collapse
Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam has stated that U.S. regulators lack the authority to preemptively prevent another major crypto collapse similar to the FTX incident.
Speaking at the Financial Markets Quality Conference 2023 at Georgetown University, Behnam underscored that, despite urging the Senate Banking Committee almost a year ago to swiftly address regulatory concerns, “nothing has changed, and we could be in a position where another FTX type event happens.”
Behnam called on Congress to create a comprehensive regulatory framework for the digital commodity market, stating that the CFTC lacked the authority to regulate it adequately. He noted that the CFTC’s current authority is limited in the direct cash markets, where assets like Bitcoin are traded.
Calling for appropriate authority granted by Congress to prevent future incidents, Behnam highlighted the CFTC’s more extensive oversight in the crypto derivatives sector, where it can assess company registrations and directly supervise behaviors. He also pointed out that the Securities and Exchange Commission (SEC) primarily regulates securities markets. While SEC Chair Gary Gensler considers the majority of crypto tokens as securities, certain cryptocurrencies like Bitcoin and Ethereum fall outside the SEC’s jurisdiction.
Efforts to expand the Commodity Futures Trading Commission’s (CFTC) jurisdiction over direct cash markets in the crypto space through legislative measures are facing delays in Congress. Although bills have been introduced in the House of Representatives, progress has been sluggish, with some awaiting action after committee approvals. The bills encounter challenges in the Senate, contributing to a perceived “holding
