WASHINGTON – Several legislators from the United States Senate advocated this Thursday for regulating the cryptocurrency market in view of the collapse of the FTX platform, whose collapse has caused losses in value of several cryptocurrencies.
In an appearance in the Upper House, which was still going on at noon this Thursday, Senators Debbie Stabenaw (Democrat) and John Boozman (Republican) defended their proposal for a law to give more authority to the Futures Trading Commission of Commodities (CFTC, in English) to regulate digital products.
The president of the CFTC, Rostin Behnam, who was questioned at the appearance, pointed out that this law would have served to prevent many of the behaviors on the part of FTX and its affiliated companies that ultimately led to their collapse.
“We are here because many Americans have invested in a new product and are probably going to lose money because of it. that markets for digital products do not enjoy the basic protections (…) that make US financial markets the envy of the world”, Behnam said during his opening statement.
During the hearing, members both Democrats and Republicans in the Senate were in favor of increasing supervision of the cryptocurrency market, although they recognized that there is a knowledge gap on how this technology works that makes it difficult to move quickly in this area.
Some Republicans, in fact, went so far as to propose a (at least temporary) ban on cryptocurrencies in the United States, something Behnam opposed since “cryptocurrencies would continue to exist abroad, and their risks would end up coming back to us somehow.” way.”
For their part, some Democrats, such as Illinois Senator Dick Durbin, were skeptical that a relatively small office such as the CFTC (which is sometimes seen as the “soft” version of the US Securities and Exchange Commission, the SEC) can regulate such a broad market
Broker, lender and custodian
One of the specific characteristics of the FTX business model most criticized by the head of the CFTC was the fact that the platform functioned as a broker, lender and custodian of its clients’ money, something which does not occur in traditional financial systems.
Behnam argued that the legislation proposed by Stabenaw and Boozman would have prevented the alleged illegalities committed by FTX and many of its affiliated companies, citing the case of LedgerX, a US subsidiary under CFTC supervision that has not been been so affected by the crisis and will be able to pay its clients.
The head of the office assured that the regulations that regulate LedgerX in the United States are the basis of the legislation that p ropon to supervise the cryptocurrency market.
Last 000 November, the FTX platform, which came to be valued at $
Its founder and until then chief executive officer, Sam Bankman-Fried, one of the most recognizable faces in the cryptocurrency business, resigned, after which a new board led by the bankruptcy expert John Jay Ray III.
Ray and lawyers for the new board maintain that a “substantial amount” of the company’s assets may have been stolen or are missing.
The new managers have also denounced that the company had a “total absence of corporate controls” and a lack of “reliable financial information”.
The newspaper The Wall Street Journal, citing anonymous sources, assured this Wednesday that the Department of Justice and the SEC are investigating the company.
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