CFTC’s Behnam to Testify at Senate Committee on FTX

The collapse of cryptocurrency exchange FTX will be the focus of a Dec. 1 hearing to be held by the U.S. Senate Committee on Agriculture, Nutrition and Forestry. 

The hearing is to be called “Why Congress Needs to Act: Lessons Learned from the FTX Collapse,” according to a Monday (Nov. 21) press release issued by the committee’s chairwoman, Sen. Debbie Stabenow, D-Mich., and ranking member, Sen. John Boozman, R-Ark. 

Scheduled to speak at the hearing is Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam. 

In another press release issued Monday, Stabenow called on Congress to act on the Digital Commodities Consumer Protection Act (DCCPA), which mandates that crypto firms offering digital commodities to customers comply with the requirements that traditional intermediaries must meet in terms of capital, liquidity, segregation of funds, cybersecurity and conflicts of interest. 

The DCCPA also requires the firms to disclose risks and gives the CFTC real-time visibility into digital commodity transactions, according to a fact sheet that accompanied the press release. 

“In the wake of the FTX collapse, the consumer protections in the bipartisan Digital Commodities Consumer Protection Act (DCCPA) are needed now more than ever,” the press release said. “The DCCPA would have prohibited the misconduct and risky behavior undertaken by FTX. It is clear that Congress needs to act.” 

As PYMNTS reported Monday, regulators have begun to craft legislation that reflects the increased pressure for scrutiny on cryptocurrency trading, investments and the platforms that support this emergent ecosystem. 

These comments are in keeping with a PYMNTS survey that found 52% of traditional financial firms which are considering blockchain and crypto adoptions say that unclear regulation was their main concern. 

The growing pressure for scrutiny of the crypto industry follows the collapse of what had been one of its largest players — the crypto trading platform FTX.