Rostin Behnam points to CFTC-regulated LedgerX as success story amid FTX collapse

Commodity Futures Trading Commission, oregon CFTC, seat Rostin Behnam has cited LedgerX, the crypto derivatives and clearing level based successful the United States which was not portion of FTX Group’s Chapter 11 filing, arsenic an illustration of however regulating crypto firms could payment U.S. consumers. 

In a Dec. 1 proceeding of the Senate Agriculture Committee exploring the illness of FTX, Behnam said LedgerX had fundamentally been “walled off” from galore of the companies wrong FTX Group — including those that filed for bankruptcy — that provided a regulatory model for the CFTC. The CFTC seat said LedgerX was “healthy”, “solvent”, and “operational” compared to different FTX entities.

“The limitations of our authorization stopped astatine [LedgerX],” said Behnam. “For those aforesaid reasons that we were walled disconnected from going past the regulated entity, the different FTX entities were not capable to pierce done LedgerX and perchance instrumentality lawsuit money, which obviously, arsenic a regulator, is the priority.”

In his written grounds for the hearing, the CFTC seat said:

“Many nationalist reports bespeak that segregation and lawsuit information failures astatine the bankrupt FTX entities resulted successful immense amounts of FTX lawsuit funds being misappropriated by Alameda for its proprietary trading. But the lawsuit spot astatine LedgerX – the CFTC regulated entity – has remained precisely wherever it should be, segregated and secure. This is regularisation working.”

CFTC seat Rostin Behnam addressing Senate Agriculture Committee connected Dec. 1

Behnan added that FTX had reported LedgerX held “more currency than each the different FTX debtor entities combined” successful its bankruptcy filings. The CFTC chair, committee seat Michigan Senator Debbie Stabenow and ranking subordinate Arkansas Senator John Boozman pointed to the Digital Commodities Consumer Protection Act, oregon DCCPA, arsenic a imaginable solution to the events starring up to FTX’s insolvency, which near galore U.S. consumers successful the lurch.

“The crypto manufacture lacks the lawsuit protections that Americans expect and deserve,” said Stabenow. “When trading successful U.S. markets, erstwhile exchanges judge lawsuit funds for trading they indispensable not beryllium allowed to gamble with those funds [...] FTX did each of those things, emboldened by a deficiency of national oversight.”

Related: US senators perpetrate to advancing crypto measure contempt FTX collapse

Since filing for bankruptcy nether Chapter 11 successful the District of Delaware, FTX has been the people of planetary regulators and lawmakers investigating the exchange, including Turkey’s Financial Crimes Investigation Agency, authorities successful the Bahamas and U.S. authorities and national authorities. The U.S. House Financial Services Committee scheduled a hearing to analyse the events astir the illness of the crypto speech connected Dec. 13, and the adjacent tribunal proceeding successful the bankruptcy lawsuit has been scheduled for Dec. 16.