Tuesday, February 7, 2023
HomeLaw & PoliticsCFTC Chair Requests Pause On Digital Commodities Consumer Protection Bill

CFTC Chair Requests Pause On Digital Commodities Consumer Protection Bill

CFTC Chair Rostin Behnam told the Senate Agriculture Committee, in the first of multiple legislative hearings on FTX, that his agency couldn’t have stopped the collapse since FTX wasn’t a regulated firm. The FTX collapse has already shook the entire crypto market, as evidenced by sharp price drops in cryptocurrencies such as Bitcoin and Ethereum, as well as sharp drops in the stock of cryptocurrency-related companies.

Behnam asked lawmakers to give him more power so he could directly oversee spot cash market exchanges, which are not regulated by the government right now. The Securities and Exchange Commission is in charge of tokens that are considered securities.

Most senators didn’t appear to know the difference between FTX US, the company established in the United States, and FTX.com, the global exchange situated in the Bahamas. FTX.com has had to deal with a number of problems, including what seems to be the transfer of money from customers and businesses to Alameda Research, a trading company that is connected to FTX.

According to Benham, the DCCPA would have prohibited the mixing of client and company funds, as well as required improved corporate governance and accurate accounting. He said that if the Digital Commodities Consumer Protection Act (DCCPA), backed by committee chairs Senators Debbie Stabenow (D-Mich.) and John Boozman (R-Ark.), had been in place, this kind of behaviour would have been illegal. Benhnam said that the law should be changed so that it covers possible wrongdoing at other organizations.

In less than a month, reporting and the bankruptcy process have uncovered a laundry list of additional decisions and practices that would constitute financial fraud if FTX had been a U.S. regulated entity—and this is without taking into account any crypto-specific regulations that may have been in place at the time. These scams may still be challenged in court in the United States on the grounds that they were complicit in the actual theft of property belonging to American residents.

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Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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