CFTC Chief Says FTX Plan Could Make Crypto Markets 'More Efficient'

FTX.US’s effort to triumph authorities support to straight wide its customers’ derivatives trades needs an reply due to the fact that it won’t beryllium the past connection of its kind, the main of the Commodity Futures Trading Commission told U.S. lawmakers connected Thursday.

“There volition beryllium much successful the future,” CFTC Chairman Rostin Behnam said during a proceeding of the House Agriculture Committee, which oversees his agency. He said the proposal from FTX.US Derivatives – though caller – is simply a logical result of the caller exertion to “break down immoderate of these silos and person much nonstop access,” though helium said helium hasn’t decided whether to enactment it.

“This connection could extremity up starring to much businesslike trading execution, little hazard successful the system,” Behnam said, adding that he’s required to cultivate “responsible innovation,” and the thought isn’t needfully prohibited oregon successful usurpation of commodities laws. Still, helium considered the question worthy a important ongoing public-comment period. “As we are considering and contemplating the FTX proposal, we're doing it cautiously,” helium said.

FTX had applied to let its trading level to straight wide derivatives that are backed by margin, and FTX.US President Brett Harrison argued earlier this period that “large amounts of clip betwixt margining periods causes hazard to physique up successful the system, resulting successful marketplace swings,” and this alteration would code that problem.

Harrison, whose institution hired erstwhile CFTC commissioner and acting seat Mark Wetjen to shepherd its regulatory goals, said an support from the CFTC would acceptable up FTX arsenic “the archetypal crypto-native speech that is capable connection margined crypto derivatives successful an integrated level with a cryptocurrency spot exchange.”

However, the committee’s Democratic president was suspicious of the plan.

“This needs acold much review,” said Rep. David Scott, calling the FTX thought “unproven and untested.” He said he’s “very acrophobic astir this.”

After the CFTC’s 60-day remark period, which ends May 11, Behnam said his unit volition program for a roundtable connected non-intermediated marketplace operation aboriginal that month. The bureau volition besides past person a afloat slate of commissioners, aft the Senate this week confirmed 4 nominees to capable gaps successful the shorthanded agency.

The CFTC could, successful the end, determine to marque tweaks to the FTX thought based connected the agency’s interior reappraisal and extracurricular input, and past it would beryllium up to the institution to determine whether it tin unrecorded with those changes. Behnam said helium doubted an FTX support would necessitate changes to existing commodities rules.

Meanwhile, the bureau main argued that it’s progressively important for this “largely unregulated market” to enactment a explanation to what makes a integer commodity. He said that explanation should travel from the CFTC.

Behnam, installed arsenic president by President Joe Biden, besides seized a accidental during questioning to pass lawmakers that the bureau needs much wealth to woody with its rapidly expanding responsibilities – including implicit crypto assets.

“I bash deliberation we volition request an accrued fund to woody with each of these issues successful the integer assets space,” Behnam said.