$100 Million
It would take at least an additional $100 million to support that expanded role, Behnam said earlier this year. The CFTC has requested $365 million in funding for fiscal 2023, which ends on Sept. 30, 2023. That compares with $320 million in 2022, excluding a one-time appropriation related to leases. By comparison, the SEC requested about $2.15 billion, up from about $2 billion in 2022.
Behnam says there’s a need to take a step back and reflect on what happened with FTX to make sure existing legislative proposals aren’t missing any important elements. But he said the crisis shouldn’t put those efforts on pause.
“We need to move quickly on a thoughtful regulatory approach to establish guardrails in these fast-growing markets of evolving risk, or they will remain an unsafe venture for customers and could present a growing risk to the broader financial system,” he said in his prepared remarks.
Gensler’s Warning
Gensler has repeatedly said existing securities laws apply to the crypto industry and underscored his agency’s need for more resources to go after bad actors and securities scofflaws. Soon after FTX.com showed signs of teetering, he cautioned Congress against passing legislation that might undermine the broader financial markets.
Regulators and lawmakers have faced public scrutiny of their relationships with Bankman-Fried. Behnam’s push to speed up legislation after FTX’s collapse could put him further in the hot seat with some.
Millions of dollars in campaign donations to both Democrats and Republicans probably didn’t hurt Bankman-Fried’s quest to help stave off scrutiny. He gave $39.4 million during the US midterm elections. FTX US cut a $1 million check to the Republican-aligned Senate Leadership Fund on Oct. 27, just days before the elections and weeks before it filed for bankruptcy, according to Federal Election Commission filings.
The crypto industry, investors and consumer advocates will be closely watching Congress’ next moves.
FTX provides the opportunity to understand the distinctions between centralized crypto exchanges and “decentralized finance,” or DeFi, exchanges that aren’t under the control of any single party -- and avoid giving one competitive advantages over the other, said Agnes Gambill West, visiting senior research fellow at the Mercatus Center at George Mason University.
Still others are hoping a consistent and specific conflict-of-interest rule for crypto will emerge out of the coming congressional postmortems on FTX.
“Without that, we’re going to continue to have messy activity,” said Sarah Hammer, a former senior Treasury official and now managing director of the Stevens Center Blockchain Laboratory at the University of Pennsylvania’s Wharton School.
This article was provided by Bloomberg News.