‘Never Let a Good Crisis Go to Waste’: CFTC Commissioner Calls on Congress to Act After FTX Debacle

Kristin N. Johnson discusses the FTX fiasco and why Congress should take a pragmatic approach in closing the regulatory gap.

AccessTimeIconNov 10, 2022 at 5:58 p.m. UTC
Updated May 9, 2023 at 4:02 a.m. UTC
Layer 2
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Crypto exchange FTX’s demise may finally spur lawmakers in the U.S. to set clear regulatory guidelines for the digital asset industry, said Commodity Futures Trading Commissioner (CFTC) Commissioner Kristin N. Johnson.

Johnson told CoinDesk TV’s “First Mover” the CFTC, along with the Securities and Exchange Commission (SEC), are currently “limited” in their ability to engage in enforcement activities with crypto exchanges. The gray area is even more muddled because FTX is a Bahamas-based crypto exchange, not based in the U.S.

“There is a regulatory gap that really limits our ability,” Johnson said, and thus Congress needs to act to clear the fog on crypto regulation. FTX being on the verge of collapse gives Congress plenty of reasons to act, and is a prime example of “never letting a good crisis go to waste,” she said.

Had the CFTC regulated FTX, Johnson added, its outcome might’ve likely looked different.

“If FTX had been a regulated entity under our regulatory umbrella, customer bonds would’ve been protected, there would’ve been liquidity reserve requirements in place [and] there would’ve been monitoring and surveillance that is not immediately available,” she pointed out.

She added that she is “hopeful” Congress will make an effort to address the lingering questions by “giving clear direction to the SEC and the CFTC” as to how each agency should proceed in future, while ensuring that each agency “has the resources to accomplish those tasks.”

Global markets are fragile in nature, Johnson said, and in order to “protect markets and investors, the best path forward is clear legislation.”

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Fran Velasquez

Fran is CoinDesk's TV writer and reporter.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


Read more about