Senators Probe CFTC-SBF Relationship Amid FTX Fallout: Calls for Transparency

• US Senators are closely relooking into the FTX and Alameda case to properly regulate the web3, stablecoins, and digital assets industry.
• The US Congress has admitted that no one single agency can fully regulate the cryptocurrency industry.

The implosion of FTX and Alameda Research has time and again been described as the worst failure in modern American corporate industry. Despite the cryptocurrency market cap having almost tripled since the event, regulators are keen to prevent a similar incident in the promising web3 and digital asset industry.

As Crypto News Flash previously reported, former FTX boss Sam Bankman-Fried alias SBF is fighting to negate the 25-year imprisonment, which provided a cold relief to the distressed investors. Furthermore, millions of FTX users are yet to understand if they will ever be fully compensated for the losses incurred.

US Senators Question CFTC Chair Rostin Behnam on FTX Collapse

Most of the United States Senators, apart from Elizabeth Warren, have remained vocal on the FTX and Alameda collapse. With more than 52 million US citizens already invested in the cryptocurrency market, Congress members seeking to secure another term in the upcoming election have focused on them as a voting bloc.

In the latest bid geared towards obtaining voter sympathy and regulating the crypto industry, US Senators Elizabeth Warren and Charles E Grassley have written a formal letter to Rostin Behnam, current chairman of the Commodity Futures Trading Commission (CFTC). According to the letter dated April 12, 2024, the CFTC Chair is expected to detail the communication with SBF before the multi-billion collapse. 

Furthermore, Behnam testified before the Senate Agriculture Committee and agreed that he met with SBF and his team 10 times before the collapse of FTX and Alameda Research. As a result, the two senators are requesting a detailed account of the meetings, and phone calls before the end of this month.

You also acknowledged having exchanged a number of messages with Mr. Bankman-Fried. At the same time, Senator Hawley expressed similar concerns about your relationship with Mr. Bankman-Fried in a letter he sent requesting all correspondence between the two of you. In order to understand the nature of your repeated correspondence with Mr. Bankman-Fried in the months leading up to the public revelation of his crimes, please provide answers to the following questions no later than April 29, 2024, 

Crypto Market Picture

Several crypto-related companies in the United States led by Coinbase Global and Ripple Labs have been pushing Congress to enact clear crypto regulatory rules. Furthermore, crypto leaders have indicated that the US SEC led by Chair Gary Gensler has been pushing for siloed securities law on the crypto assets through enforcement.

As Crypto News Flash recently pointed out, Uniswap Labs, the leading web3 protocol on the Ethereum ecosystem, is under regulatory scrutiny from the US SEC for allegedly enabling trading of unregistered securities. Nonetheless, it is safe to assume that crypto assets are here to stay as shown by the increased demand from institutional investors around the world.