At the Georgetown University’s Financial Markets Quality Conference 2023, Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam highlighted the ongoing risks of the cryptocurrency market. Despite changes in the market dynamics since last year, Behnam warned of the high likelihood of another crisis like the FTX collapse.
He emphasized that the CFTC’s jurisdiction over markets that facilitate trading of assets like Bitcoin is not limited, which hinders the CFTC’s ability to closely oversee company registrations and monitor their activities in the cryptocurrency sector. Moreover, the Securities Exchange Commission (SEC) is the only regulator that holds jurisdiction over the securities markets, leaving a significant oversight gap for the digital asset market.
Despite the lack of enthusiasm for crypto investing compared with the period prior to the FTX crash, Behnam cautioned that “We might be in a situation where another FTX-type event occurs” as the fundamental regulatory issues remain unresolved.
Behnam highlighted the urgent need for an effective and clear regulatory framework for digital currency, reiterating the CFTC’s limited capacity to regulate the digital commodity market without adequate legislative empowerment. He demanded that a solution be found as quickly as possible in order to find the right balance between protecting investors and market integrity and encouraging innovation in the rapidly evolving digital currency space.