The US Senate Committee on Agriculture, Nutrition, and Forestry will hold a hearing titled “Why Congress Needs to Act: Lessons Learned from the FTX Collapse.” The Committee has oversight of FTX due to the fact that certain crypto assets are regulated by the Commodities Futures Trading Commission (CFTC).
Last week, the Committee announced the hearing that is scheduled to take place on December 1, 2022. No hearing memo is yet available, but Rostin Behnam, Chairman of the CFTC, is currently scheduled to testify on the FTX debacle and will probably provide recommendations for the members as to how crypto could be better regulated.
As was previously reported, the House Committee on Financial Services will also hold a hearing in December on the collapse of FTX. No date is yet available, as well as any potential witnesses.
Congress has rushed to point fingers at the bankruptcy of FTX and its founder and former CEO, Sam Bankman-Fried. Once the pied piper of crypto, Bankman-Fried has morphed into a crypto pariah – a poster child for all that does not work in digital assets.
Prior to the bank run-like failure of FTX, Bankman-Fried had been working the halls of Congress to craft regulation that would enable crypto to innovate and grow – perhaps with regulation that was less cumbersome than existing securities law. Now political allies are running for cover, dimming the chances for light-touch legislation. The failure of FTX has probably done more damage than any past crypto debacle.
Meanwhile, blockchain or distributed ledger technology (DLT) proponents still persevere in advocating on behalf of the technology that can reduce intrinsic friction in traditional financial markets and perhaps foster new ones.
In the Bahamas, where FTX was regulated, authorities are defending their position on FTX as the lead regulator of the firm. Bahamanian Senator The Hon. L. Ryan Pinder, KC, Attorney General & Minister of Legal Affairs, delivered a National Address today (November 27) commenting on FTX as well as the digital asset industry in general. Pinder stated that there is an active investigation into the failure of FTX involving both civil and criminal authorities. Pinder also criticized the statements of the new FTX CEO as misrepresenting Bahamian actions towards FTX.