The co-founder and chief executive officer of FTX, Sam Bankman-Fried showcased his new lobbying operation. He planned to convince influential Washingtonians that crypto demands more regulation. FTX is one of the world’s largest crypto trading platforms. It was actually a classic networking party held in Park Hyatt hotel’s private room.
Crypto demanding rules is both inevitable and odd. How come a crypto seeks federal oversight? Said Bloomberg. In March this year, President Joe Biden approved an executive order specifically to call federal agencies to lay work on crypto policies. It corresponds to the situation where lawmakers and bureaucrats face a fast and risky $2trn market.
After buying the Miami Heat’s basketball arena, Bankman-Fried urges his own ideas on how the regulation should be and who will be his main watchdog. For the U.S. Commodity Futures Trading Commission (CFTC), Bankman-Fried demand for a bigger role in the operation. This is because he noted that small agencies currently monitor contracts in basic goods such as corn, pork, and crude oil. Financial derivatives such as interest-rate swaps are also under small agency monitoring.
CFTC could oversee U.S. futures and contract options on the two most popular cryptocurrencies; Bitcoin and Ether. FTX offers these crypto derivatives. So, basically CFTC purviews this business.
In addition to Bankman-Fried demand, he expects the Congress to leverage CFTC’s authority to cover trading in coins. This is because CFTC only claims jurisdiction over cash token markets. The cases can help suspect fraud or manipulation affecting crypto derivatives. A month before his proposal, he gave testimony to the Senate that the institution is lacking clarity. Thus, it is bad for both investors and industry. Other trading platforms are looking forward to CFTC overseeing, said industry leaders.
