CFTC Commissioner Urges Congress to Expand Crypto Oversight to Prevent Crises
• CFTC Commissioner Kristin Johnson is calling for Congress to expand the CFTC’s authority to review crypto acquisitions.
• Johnson is concerned that existing regulation may not be enough to prevent future crypto crises.
• She is advocating for regulation that formalizes the obligation to separate customer property, ensure financial resource requirements, and introduce effective governance and risk management controls.
The recent collapse of FTX, a crypto derivatives exchange, has sent shockwaves through the cryptocurrency industry and has caused many to question the level of oversight and regulation of the space. In light of this, CFTC Commissioner Kristin Johnson has urged Congress to expand the agency’s authority to review crypto acquisitions in order to prevent any future crypto crises.
During a speech at Duke University on Wednesday, Johnson proposed that the U.S. agency should be able to conduct due diligence on any company – domestic or foreign – that seeks to purchase a minimum 10% share of the equity interest in a CFTC-registered market participant. She believes this would help ensure that customer property is properly separated, financial resource requirements are met, and effective governance and risk management controls are in place.
Johnson also noted that existing antitrust legislation may not be enough to protect investors from the risk of another crypto crisis. She argued that Congress should consider revisiting the existing regulatory frameworks in order to ensure that the CFTC is able to effectively oversee crypto acquisitions and provide proper protection to investors.
In the wake of the FTX collapse, Johnson is hoping that Congress will act quickly to expand the CFTC’s authority and ensure that proper oversight is given to crypto acquisitions. She believes that this is an important step in preventing future crypto crises and providing investors with the protection they deserve.