Commodity Futures Trading Commission (CFTC) President Rostin Behnam expressed concern about the limitations of US regulatory authority in preventing another major cryptocurrency market crash similar to the FTX crash.
Behnam's comments at the 2023 Quality of Financial Markets Conference: Speaking at Georgetown University's 2023 Quality of Financial Markets Conference, Behnam fixed"Nothing has changed and we could be in a position where another FTX-type event occurs."
He noted the distinct shift in the cryptocurrency investment climate compared to the period before the FTX implosion, acknowledging that โthe market environment is very, very different today than it was a year ago.โ
CFTC Limited Authority in Crypto Markets: Behnam highlighted the CFTC's restricted regulatory powers, especially in direct asset trading markets such as bitcoin BTC/USD.
The agency's intervention is limited to cases of market manipulation and fraud, unlike its broader authority in the crypto derivatives sector.
He also mentioned the United States Securities and Exchange Commission (SEC), headed by Gary GenslerIt primarily oversees stock markets, leaving some cryptocurrencies, including Bitcoin and Ethereum, outside its jurisdiction.
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Legislative challenges and regulation of the crypto market: Mail-ftx FTT/USDUS legislation aimed at expanding the CFTC's jurisdiction over direct cryptocurrency cash markets remained stalled.
Despite approval by House committees, the bills lacked necessary support in the Democratic-controlled Senate. "There's obviously a lot going on in Congress these days," Behnam said.
"These bills have been caught, I think, in a bit of a holding pattern."
Lobbying Efforts and Congressional Approach: Crypto lobbyists expected the House to vote on cryptocurrency-related bills, including those establishing U.S. guidelines for stablecoin issuers, by the end of the year. However, Congress's attention has been diverted to budget negotiations and leadership changes, following the replacement of the former president. Kevin McCarthy (R-Calif.) with Rep. Michael Johnson (R-La).
CFTC participation in prediction markets: Addressing the CFTC's legal battle with the prediction market KalshiBehnam discussed the challenges of overseeing betting contracts with political outcomes.
He expressed reluctance for the CFTC to become involved in monitoring elections, saying, "If there are allegations of fraud or manipulation in an election... you can imagine that then we will become election police."
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