CFTC Chairman Rostin Behnam to Be Grilled Over FTX Crash (Report)

The US lawmakers will reportedly talk about FTX’s collapse with Rostin Behnam – Chairman of the Commodity Futures Buying and selling Fee (CFTC).

The authorities will study whether or not the regulator might have executed one thing to keep away from the disaster.

Behnam within the Scorching Seat

In accordance with a Reuters coverage, the committee that oversees the CFTC will host a listening to known as “Classes Discovered From the FTX Collapse, and the Want for Congressional Motion.” The company will query Rostin Behnam concerning the big crash of FTX and whether or not the watchdog might have prevented it.

The committee might additionally ask in regards to the goal of the “many conferences” between the CFTC and a few of FTX’s workers, together with its former CEO – Sam Bankman-Fried.

Behnam beforehand revealed that either side met incessantly to debate the change’s software to “instantly clear buyer trades.” Such plans had been pulled as soon as FTX filed for Chapter 11 chapter safety.

“There are components of the applying that I feel have benefit, however in the end we didn’t give you a call. We had been really not even shut as a result of there have been extra questions,” he mentioned.

The Chairman insisted he has urged the American lawmakers to grant extra authority to the CFTC to impose guidelines on the sector. In his view, although, more durable rules won’t have prevented the meltdown of FTX.

There’s a little bit of confusion about which US watchdog ought to primarily monitor the cryptocurrency business. The CFTC is liable for derivatives markets and is allowed to halt fraudulent schemes. Nevertheless, it isn’t accountable for spot markets.

The US SEC, then again, has extra authority to crack down on circumstances involving particular person traders. Its Chairman – Gary Gensler – lately labeled most cryptocurrencies as securities, that means they need to fall underneath his company’s jurisdiction. The CFTC ought to have “direct regulatory authorities over the underlying non-security tokens,” he opined.

Dispute Between the Regulators

The Chairman of the CFTC shares an reverse stance than Gensler, viewing bitcoin and ether as commodities or in the identical class as oil, pure gasoline, and valuable metals.

“I’ve instructed [ether] is a commodity, and Chair Gensler thinks in any other case,” Behnam mentioned in October.

The SEC’s Chairman beforehand said that Ethereum’s transition from a Proof-of-Work consensus mechanism to Proof-of-Stake, generally known as the Merge, may flip the native token of the protocol – ether – right into a safety.