Sam Bankman-Fried worked for the CFTC to treat cryptocurrencies as a digital commodity, but Rostin Behnam said regulatory issues are currently unclear. Gellash believes the collapse of FTX shows the urgent need for legislation, but regulators might worsen the situation even further.
It is hard to imagine the repercussions of the FTX collapse, whose darkest scenarios are on the table. Various crypto ecosystem participants have commented on the latest developments regarding the cryptocurrency exchange. However, the silence from the authorities is evident, as there have been no official reactions but only hallway rumors.
The CFTC Has Negotiated with Sam Bankman-Fried and FTX
Everyone first looks at the Commodity Futures Trading Commission (CFTC), the federal agency responsible for regulating commodities. It is relevant to remember that Sam Bankman-Fried worked for that institution to treat cryptocurrencies as a digital commodity.
Rostin Behnam, the chairman of CFTC, said in September that he favored the bill supported by the CEO of FTX. However, the spokesperson for the institution recently reacted by stating that regulatory issues are currently unclear.
The SEC Needs to Take a Position on the FTX Collapse
Observers are also waiting for the US Security and Exchange Commission (SEC) to react to the FTX collapse. Due to the lack of an official statement, Ty Gellasch expressed his viewpoint on the case.
This former market consultant for the SEC and executive director of the Healthy Markets Association said regulation is at a crossroads.
Gellash said that the collapse of FTX shows the urgent need for legislation. However, he thinks Sam Bankman-Fried does not know what he is talking about, and regulators could further worsen the situation.
The SEC must consider whether to regulate or allow the market to take over. The legislative branch says it wants to protect US citizens from international companies like FTX profiting in the country.
Patrick McHenry Believes the Treasury Department and Congress Must Help
Eventually, US consumers will be among the victims of the FTX collapse. However, Gambill West, another specialist in the industry, said crypto companies affected by bankruptcies are not always in the United States. Therefore, his questioning regarding which laws apply to those events has remained unanswered.
Patrick McHenry, a member of Congress, summarizes the current reflections of the political class in the United States. He considers it imperative they establish a regulatory framework to protect US citizens while allowing innovation to thrive.
In the coming days, there will be further reactions to the collapse of FTX, leading the public to view cryptocurrencies differently.
Over the last few days, the collapse of FTX has affected the value of cryptocurrencies. Although Changpeng Zhao agreed to buy the company to help solve its liquidity crisis, he declined to complete the transaction.
Meanwhile, Bitcoin is trading at around USD 16,753 and has accumulated a 6.7% loss over the last 24 hours. While its daily trading volume is above USD 78 billion, its market capitalization is about USD 321.71 billion, according to CoinGecko.
By Alexander Salazar
