CFTC Chair calls for strict regulations over cryptocurrency

The US Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam urged the country’s lawmakers to pass legislation that imposes strict oversight on the cryptocurrency world.

The CFTC Chair on Thursday emphasized the risks the digital asset market is currently in. He also indicated the unprecedented collapse of the crypto exchange FTX and stressed having rules in place to avoid conflict of interest that can lead to a similar disaster.

Behnam’s commission oversees the derivatives market. It had been requesting additional power to look over digital commodity exchanges. FTX also supported the bill, as the firm wanted to have a less stringent regulator than the SEC.

Behnam and FTX
The CFTC head met with FTX founder Sam Bankman-Fried before the firm’s collapse. They happened to discuss a proposal that would allow users to engage in trading with money borrowed from FTX, with the involvement of a broker.

Behnam said his commission lacked authority to analyze FTX’s other entities and operations, other than LedgerX, a subsidiary regulated by CFTC. LedgerX is the only entity under FTX that is not a part of the bankruptcy.

The FTX collapse has shed more light on the instability of cryptocurrency platforms, as the lack of asset protection could affect digital investments.