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NEW YORK/WASHINGTON (Reuters) – U.S. Commodity Futures Trading Commission (CFTC) officials on Wednesday urged lawmakers to ban cryptocurrency exchanges from trading commodities that are self-certified by the Commodity Futures Trading Commission. plan to warn
The CFTC already allows exchanges to self-certify for listing contracts in other commodities, such as commodities. Lawmakers were considering a similar process as part of the cryptocurrency bill launched last year.
However, CFTC Commissioner Christy Goldsmith-Romero said some crypto assets are likely to be securities that need to be overseen by a separate body, the Securities and Exchange Commission (SEC), so this process should not be used. said it opens the door to “regulatory arbitrage”.
In a statement prepared for an event at the University of Pennsylvania, she said the process “needs oversight to prevent abuse.”
She warned lawmakers to draft legislation to better oversee the troubled crypto industry, which has had a wave of bankruptcies last year and continues to reel from FTX’s sudden collapse and alleged fraud. It was issued when the
Romero also questioned the level of due diligence companies performed before investing in FTX, suggesting there may be incentives to “turn a blind eye” to red flags in a competitive market.
Federal prosecutors have indicted three former FTX executives, accusing them of defrauding investors and misappropriating client funds.
The SEC is also looking into due diligence on FTX investors, according to two sources familiar with the investigation.
To regain public trust after the FTX meltdown, Goldsmith Romero says the crypto industry will establish strong corporate governance and increase the role of gatekeepers such as lawyers and compliance experts in companies. Said it was necessary.
“Gatekeepers should have seriously questioned FTX’s operating environment leading up to the meltdown,” she said.
Reporting by Chris Prentiss.Editing by Josie Kao
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