In a bipartisan approach, Senators Elizabeth Warren(D-Mass) and Chuck Grassley (R-Iowa) have written a formal letter to the chair of the U.S. Commodity Futures Trading Commission (CFTC) Rostin Behnam requesting details of communications between the CEO of the crypto exchange FTX, Mr.Sam Bankma-Fried and him. The accusation came as Bankman-Fried was sentenced to 25 years before a multi-billion-dollar fraud last month.
Senators demand extensive details on CFTC and CEO FTX communications
The senators hereby seek to inquire into the records peculiar to the engagement of the CFTC members, Sam Bankman-Fried, and any of his employees all through Behnam’s tenure. Members of the parliament have numerous ways of approaching this, such as setting up meetings, phoning if necessary, laying out messages verbally and in writing, and including official as well as private communication channels.
Such inquiry in the letter attempts to explore how deeply CFTC was informed and actively involved with Bankman-Fried prior to his being reckless with Cryptocurrency that resulted in the occurrence of FTX implosion in the month of November 2022.
During bearing testimony to the US Senate Agriculture Committee just after a few times in becoming of FTX’s downfall, Behman revealed last year to the media that he and his team directed meetings with Bankman-Fried and his associates approximately ten times in CFTC offices and exchanged many messages.
Impacts of regulatory oversight and market honesty
Nevertheless other investigations from senators, especially from Senator Josh Hawley’s (R-Mo.) quest has shown a need for more transparency as to how these multilateral dialogues are conducted.
The senators’ query demonstrate the ambiguous regulatory theme area surrounding digital currency in the innovative crypto market. Therefore, the swiftness and level of lawmakers to push for a detailed timeline on the CFTC’s relations with FTX and related entities becomes a mode to asses regulatory enforcement lapses and a sharped up framework for protecting American investors.
Disclosing all those details is essential for blocking not only these financial crimes but also other ones if possible. In particular, the response from the CFTC is vital for Congress to outline how such large fraud as the one in question could happen and take the steps to improve investors’ attention on their assets.
The CFTC has been allotted a term of 30 days up till 29th of April 2024 to give a reply to the senators’ AUP. The outcome of this petition may have profound consequences on revealing the levels of market transparency or the regulatory schemes that are introduced to serve as watchdogs over the rapidly growing field of cryptocurrencies.
