U. S. may prohibit crypto exchanges from transferring and self-certifying tokens
2023.01.19 03:07
U. S. may prohibit crypto exchanges from transferring and self-certifying tokens
By Kristina Sobol
Budrigannews.com – A member of the Commodity Futures Trading Commission (CFTC) of the United States has urged Congress to prohibit cryptocurrency exchanges from “self-certifying” and listing tokens without oversight.
Christy Goldsmith Romero, commissioner of the CFTC, stated to attendees of an FTX-focused event held at the University of Pennsylvania on January 18 that the current procedure was insufficient to ensure proper oversight, stating:
“I urge Congress not to allow newly regulated crypto exchanges to self-certify products for listing under the current process, which limits CFTC oversight,” the author states.
She went on to say, “It is critical to institute guardrails against regulatory arbitrage,” and one of those guardrails would be to prohibit the use of the self-certification process.
Currently, unless the CFTC blocks the listing within 24 hours, crypto exchanges can “self-certify” the safety of their product before listing.
Christy Goldsmith Romero, commissioner of the CFTC. Source: Twitter She stated that the method used to list crypto futures is inadequate for that kind of asset.
Goldsmith Romero went on to say that cryptocurrency companies that want to issue tokens could use the CFTC’s crypto regulatory framework to avoid having to register with the Securities and Exchange Commission (SEC).
In 2022, Congress was presented with proposals to increase the CFTC’s oversight of the cryptocurrency industry.
In her speech, the commissioner also urged celebrities, venture capitalists, lawyers, compliance professionals, and investors in pension funds to conduct better due diligence on crypto companies.
“Gatekeepers themselves must also step up and demand compliance, controls, and other forms of governance without allowing the company’s marketing pitch or the promise of riches to silence their objections to obvious shortcomings.”
Goldsmith Romero stated that these organizations “should have seriously questioned the operational environment at FTX in the lead-up to its meltdown” in reference to FTX, which filed for bankruptcy in November after mishandling and misplacing customer funds.
She continued, “The digital asset industry has some work to do if it wants to regain any amount of public trust.”
Observers of the crypto industry have maintained that FTX’s demise should not be attributed to a lack of regulation or the digital asset market.
Ludovic Shum, managing director of SEBA Hong Kong, a Swiss crypto bank, told Budrigannews this week that the collapse of FTX could have occurred in any industry.
According to Shum, “it goes back to the trust regarding the checks and balances.” “It was just unfortunate that it happened in this fast-growing area of the crypto world where it could have easily happened to banks, securities, houses, and asset managers.” “At the end of the day, it goes back to the trust regarding the checks and balances.”
In the meantime, Labrys CEO and founder Lachlan Feeney stated that the industry needs more oversight, not necessarily regulation, to avoid another catastrophe.
The lack of regulation was not the cause of the FTX scandal. FTX is said to have operated illegally; ignoring the regulations that are already in place rather than making use of an absence of regulation.”
“We don’t need a lot of new regulation and red tape that prevents innovation. There should probably be more oversight to stop unscrupulous players and activity before situations escalate. In a statement that he gave to Budrigannews, he said, “We need clarity on the existing regulations.”
