Sam Bankman-Fried, the FTX CEO Will testify before the House financial services committee on December 8 and he will do so alongside representatives from Circle, Coinbase, and other crypto companies as we are reading more about it in today’s cryptocurrency latest news.
FTX prepared well for the hearing since the CEO created regulatory proposals for the entire crypto industry. FTX is one of the top cryptocurrency exchanges for derivatives and spot trading as it released a wishlist of what it is hoping to see in terms of regulations in the United States. The Key Principles for Market Regulation of crypto-trading platforms allow regulatory recommendations by competitors Binance and Coinbase as Sam Bankman-Fried prepared to testify before Congress in a few days. The policy document noted 10 principles that can lead to superior outcomes for investors and the public.
— SBF (@SBF_FTX) December 3, 2021
At the top of the list, there was a call for a primary market regulator which is something that can remove the red tape for FTX since it is a platform that offers spot and derivatives trading. Right now, the Securities Exchange Commission has primary jurisdiction over securities that can include most tradeable assets. The CFTC looks after the derivatives such as Bitcoin futures so FTX recommends moving away from this fragmented approach and allowing the platforms to choose one single regulator.
FTX’s list includes disclosures for platforms that can act as crypto custodians which are then able to control how the assets are used, limit the trading or even lock the access to accounts but also report requirements for transactions and the standards for stablecoins to ensure they are not backed by volatile assets. Other exchanges are taking a proactive approach in DC and back in October, Coinbase issued a clarion call for one single regulatory regime in the Digital Asset Policy Proposal so, in order to avoid dealing with multiple regulators, the responsibility for digital assets marked needs to be assigned to one single federal regulator:
“Its authority would include a new registration process established for marketplaces for digital assets (MDAs) and appropriate disclosures to inform purchasers of digital assets.”
The FTX CEO will testify before Congress and will share his ideas on regulation but at the same time, we can see Binance that took a different approach and released a “bill of rights” for the crypto users. While not as comprehensive as the FTX documents, it admitted that the platforms have an obligation to protect users from bad actors.
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