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Odaily Translator | Nian Yin Si Tang

Summary:

Summary:

- U.S. CFTC Chairman Rostin Behnam wants new powers to regulate cryptocurrencies after FTX filed for bankruptcy protection.

- Behnam was the sole witness at the first Senate hearing on the FTX debacle, answering questions about his agency's handling of the fallen crypto giant and continuing calls for legislation.

The chairman of the U.S. Commodity Futures Trading Commission (CFTC) is taking a cautious stance in continuing to call for passage of the same legislation lobbied by Sam Bankman-Fried (SBF) to prevent future bankruptcies after cryptocurrency exchange giant FTX collapsed within days.

“We lack the authority to fully regulate the digital goods market,” Behnam said. “To prevent this from happening again, we must have appropriate authorization from Congress.”

Appearing as the sole witness at the first Senate hearing on the FTX debacle, CFTC Chairman Rostin Behnam sat in the spotlight as he continued to lobby for legislation he advocated in the wake of a series of crashes in the digital asset industry and further Promoted after spreading.FTX applied to the CFTC last year to become a derivatives clearinghouse while allowing direct margin trading. The company last monthwithdraw

applied. Behnam said he met with FTX personnel 10 times to discuss its application, a process he personally participated in due to the sensitivity of the issue.

"It's very important that we understand that we need to process and respond to applications under the law and regulations. We don't have the flexibility of putting it on the table or ignoring it. We have to respond to that."

Sen. Michael Bennet, D-Colo., pressed Behnam why the SBF and his company were actively lobbying for the Stabenow-Boozman bill.

Based on bankruptcy filings and SBF’s acknowledgments of how it operates FTX, the company may not comply if the bill becomes law.

“What makes me think is why FTX is lobbying so hard for a bill that it will never be able to comply with,” Bennet said.

“I can’t say what anyone at SBF or FTX was thinking,” Behnam said. “They would break the rules so badly that it wouldn’t work.”

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Maintain closeness with the crypto industry

Behnam believes that even if the U.S. government decides to push the entire industry overseas, digital assets will still exist.

"I don't think we can regulate it to go away," he said. "Even if we try to regulate it outside the U.S., it will still exist elsewhere and that risk will inevitably come back through retail or institutional [investors]." onto us."

Behnam argues that if policymakers create a federal framework around the market, creating more structure across the industry, including enforcing audited financial disclosures — which would help prevent client money from being mixed with proprietary money, more cryptocurrencies The company may move to the US.

That was the central argument in support of the legislation by the most senior members of the Senate Agriculture Committee, before which Behnam appeared before them on Thursday. The co-authors of the bill that Behnam wants to pass — Senators Debbie Stabenow, D-Michigan, and senior Republican Senator John Boozman, R-Arkansas — have both pledged to move forward with it.

“At best, these incidents exposed a serious lack of internal controls and a serious failure of governance. At worst, SBF and his inner circle defrauded and stole the assets of more than 1 million customers.”

"I remain committed to pushing for a final version of the bill that allows for the safeguards that the market desperately needs," he said.

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Behnam also spoke positively of the legislation, which was opposed by supporters of decentralized finance (DeFi).

Without the CFTC's new powers, Behnam reiterated a point he has made in the past, saying that "the federal regulatory framework will remain porous." He pointed to conflicts of interest at FTX, as well as the commingling of client funds, failure to maintain adequate records, and lack of Allegations of Risk Control.

“The DCCPA does address these issues and will prohibit these behaviors from happening at FTX,” Behnam said.

He also dismissed the notion that the CFTC was more lenient than the Securities and Exchange Commission (SEC), and stressed that he would continue to work with the SEC if the bill becomes law. Prior to FTX’s bankruptcy, The Block obtained a draft bill that would retain the SEC as the authority to decide whether digital assets are determined to be securities or commodities — with only the latter falling under the jurisdiction of the CFTC.

SEC Chairman Gary Gensler has said that most digital assets, potentially including ethereum, fall under the definition of securities, while suggesting that DCCPA could complicate the SEC’s enforcement role.

“If individuals would take a closer look at our record,” Behnam further said, “they would understand that we are the last thing to be a light-touch regulator. We are one of the strongest and most respected regulators in the world.”

"We need to bring these principles into this market to protect customers," Behnam added.