CFTC Commissioner Comes Out Strongly Against Self Certification of Product Listings by Exchanges

Christy Goldsmith Romero, a top US official Commodity Futures Trading Commission ,CFTC), is warning lawmakers against allowing cryptoasset exchanges to self-certify with the regulator in order to list trading products.

Goldsmith Romero suggested that this is a dangerous process, as it would enable “regulatory arbitrage”, noting that some cryptoassets could be considered securities. Securities and Exchange Commission ,seconds) – and therefore also supervised by this separate agency.

According to Reuters, citing prepared remarks for University of Pennsylvania The incident, the official said,

“Oversight is necessary to prevent misuse” of the process.

The CFTC already allows exchanges to self-certify in order to list contracts for other products, including commodities.

Since last year, lawmakers have been considering a similar process as part of a draft law they are working on. This proposed law will enable better supervision of the crypto industry.

All of this comes after a particularly difficult period for the industry, which has seen a wave of bankruptcies and legal proceedings amid the crypto winter.

Goldsmith Romero, per Reuters also noted the infamous ftx The exchange and its fallout, particularly questioning the level of due diligence firms conducted before investing in the now-defunct exchange.

She suggested that “there may be an incentive” to “turn a blind eye” to red flags in a competitive market.

What needs to be done from this corner of the crypto industry, if it wants to regain public trust after FTX, is that it needs to maintain strong corporate governance, but also increase the roles of gatekeepers in companies, such as lawyers and compliance professionals, he said.

Goldsmith Romero argued that,

“The gatekeepers should have been seriously questioning the operating environment at FTX in the lead up to its downturn.”

FTX and its group of crypto companies filed for Chapter 11 bankruptcy In early November. Sam Bankman-Fried, disgraced founder of FTX, was arrested after criminal charges were formally filed against him by US prosecutors in the Bahamas. He was eventually extradited to the US where he was later released from prison. posting a $250m bond in a New York court.

In addition, among other legal proceedings, earlier this month, the SEC brought charges against major crypto exchanges Gemini and troubled crypto lending and trading firms Produce “Unregistered Offering and Sale of Securities to Retail Investors through the Gemini Earn Crypto Asset Lending Program.”

meanwhile, as Reported, US House Republicans decided to set up a new subcommittee dedicated to cryptocurrency. Incoming financial services chairman Patrick McHenry said he plans to create the panel because he believes there is “a huge hole in the committee’s structure” as it spends more time dealing with crypto issues. . The Subcommittee on Digital Assets, Financial Technology, and Inclusion will be chaired by Representative Andrew Hill.

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