Kristin N. Johnson, who was sworn in by the U.S. Commodity Futures Trading Commission (CFTC) on March 30, 2022, is pushing for her agency to work on policy to further strengthen asset custody. of customers. As the CFTC sanctions another crypto Ponzi scheme.
“A call to action. Let’s use our existing authority to stop crypto fraud.”
So, in recent months, liquidity crises have disrupted the crypto ecosystem. Threatening the integrity of traditional financial markets.
In this regard, Kristin N. Johnson, said: “The events we have witnessed should encourage us to take two steps with all deliberate speed.”
“Liquidity crises and a lack of responsible governance on cryptocurrency exchanges have disrupted the digital asset ecosystem.”
Kristin N. Johnson calls for a call to action against crypto fraud
“A series of bankruptcy filings paints a bleak portrait of some of the most egregious corporate governance and risk management failures in recent financial market history.”
Specifically, in a statement, citing the cryptocurrency industry drama sparked by the collapse of FTX, Commissioner Kristin N. Johnson indicated that the agency should start using its existing powers to strengthen requirements for keeping the assets of investors safe. customers.
“The CFTC should leverage existing authority to further mitigate risks to all client assets.”
Continually advocate for the CFTC to use existing authority to further mitigate potential risks to all customer assets held by all current registrants or authorized participants operating in our markets, as well as prospective registrants.
The CFTC should use existing authority to protect customers. For example, the sanction on Jeremy Spence, who was convicted of defrauding investors out of $5 million.
He strongly encourages members of the public to stay informed about potential scams and abuse in the crypto markets.
Lessons learned from the FTX collapse
Likewise, CFTC Chairman Rostin Behnam testified before the United States Senate Committee on Agriculture, Nutrition, and Forestry. Particularly why Congress should act on FTX’s collapse.
“We are here today because the latest events involving FTX lay bare the consequences and I demand accountability.”
Although Rostin Behnam told lawmakers that he could not comment on possible enforcement actions against FTX, he also said that “enforcement cases take time, but we are moving quickly.”
Furthermore, he added: “As we unravel the web of interconnected financial transactions and relationships between platforms facing liquidity crises, we should anticipate a season of mergers, acquisitions and consolidations.”
“We must advance in a regulatory approach to establish protection measures. Or they will continue to be an unsafe company for customers.”
In closing, Rostin Behnam said: “The lesson here is clear: comprehensive and thoughtful regulation works to protect clients and prevent the kind of events that have happened to the other FTX entities.”
He ended with this phrase from William Tyler Freeman:
“There are no regulators who investigate or request to see the balance sheets of cryptocurrency companies that fleece all their customers.”William Tyler Freeman