U.S. regulators seek more due diligence powers as they look to FTX bankruptcy

NEW YORK: U.S. Commodity Futures Trading Commission (CFTC) officials are pressuring lawmakers to give regulators the power to investigate the books of companies seeking to capture material interests of registered market participants. .

In a statement due to be released on Thursday, Democratic CFTC Commissioner Christine Johnson said the agency would purchase more than 10% of the equity stake in any exchange or clearing house registered on the stock exchange. It said it needed the power to conduct “effective due diligence” on companies that wanted to do so. agency. Without this, unregistered companies can enter U.S. regulated markets without meaningfully exposing their books to regulators, she said.

In her statement, prepared for a speech at Duke University last week, bankrupt crypto exchange FTX will sell assets including LedgerX, a CFTC-registered digital currency futures and options clearinghouse. Announced during preparation.

“Without oversight, the licensed market is for sale,” Johnson told Reuters in a telephone interview.

The European Commission is asking parliament to give authorities powers to conduct due diligence to protect customers and maintain market stability, she said.

Lawmakers are regrouping to draft legislation aimed at better overseeing the troubled cryptocurrency industry. Questions about cryptocurrency due diligence have risen after a string of bankruptcies and the December announcement that FTX founder and former head Sam Bankman-Fried was indicted in the United States for fraud. I’m here. he pleaded not guilty.

Reuters previously reported details of FTX’s “regulatory acquisitions” strategy, which included Ledger X, granting the company three CFTC licenses in one fell swoop.