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Senate Agriculture Committee To Grill U.S. Financial Regulator Over FTX

 |  December 1, 2022

The first congressional inquiry into what went wrong at FTX is happening today (Dec. 1).

In what is sure to be just one of many such hearings investigating the historical demise of Sam Bankman-Fried’s $32 billion cryptocurrency empire, U.S. Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam will testify before the Senate Agriculture Committee about his agency’s role in the exchange’s collapse and whether it could have been avoided with better oversight.

The CFTC, which has historically overseen derivatives markets, has the authority to police fraud and misconduct but does not have the power to regulate spot markets.

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FTX’s implosion has sent waves of turmoil crashing across the crypto ecosystem, with entangled firms, including BlockFi and Genesis, also filing for bankruptcy as a result of their relationship with the now-insolvent exchange.

The commonly held sentiment across government bodies appears to be that better oversight could have prevented the collapse. FTX’s failure has created a sense of urgency among those regulators responsible for overseeing the still-emergent crypto industry.

Today’s hearing, titled “Lessons Learned From the FTX Collapse, and the Need for Congressional Action,” will hopefully provide further clarity around which governmental body or bodies should take responsibility for overseeing the crypto market.

Today’s meeting will likely provide the first indication of whether the situation surrounding FTX’s collapse has caused lawmakers to change their stance on the framework needed to support crypto regulation. U.S. Securities and Exchange Commission Chair Gary Gensler has previously said that most crypto tokens are securities, but they are currently not regulated or registered as such.

Senator Debbie Stabenow, the Democratic chair of the Senate Agriculture Committee, and its Republican ranking member Senator John Boozman will be present at the hearing.

FTX’s collapse will also be investigated during several subsequent congressional hearings this month. As reported by PYMNTS, the House Financial Services Committee is launching a series of meetings beginning Dec. 13.

A PYMNTS survey found that 52% of traditional financial firms considering blockchain and crypto adoptions said unclear regulation was their primary concern.