A leading U.S. financial regulator is due to be grilled by lawmakers on Thursday about the collapse of FTX, and whether authorities could have done more to prevent it.
In the first of several congressional hearings to examine FTX's failure, members of the Senate Agriculture Committee are likely to press Rostin Behnam, chairman of the Commodity Futures Trading Commission, over whether the turmoil could have been avoided with better oversight.
The committee, which oversees the CFTC, will hold a hearing on Lessons Learned From the FTX Collapse and the Need for Congressional Action at 10 am Eastern Time, 1500 GMT. The hearing, entitled Lessons Learned From the FTX Collapse, will be held at 10 am Eastern Time. The CFTC had many meetings with the FTX over its application to clear customer trades, Behnam said Monday at a Financial Times event. The plan was pulled after FTX filed for bankruptcy.
CFTC did not make a statement. The Senate Agriculture Committee's offices, along with its Republican ranking member Sen. John Boozman, did not respond to a request for comment.
FTX filed for bankruptcy and Bankman-Fried stepped down as chief executive on November 11, days after traders pulled $6 billion from the platform and rival exchange Binance abandoned a rescue deal.
Behnam requested more authority from lawmakers to regulate digital assets at the CFTC. He said on Monday that more clearly defined rules may not have prevented FTX's demise.
The CFTC, which oversees derivatives markets dominated by large players like money managers, has the authority to crack down on fraud and misconduct, but does not have the power to regulate spot markets.
Regulators are squabbling who should take over the responsibility of overseeing the criptocurrency market. Many Senate Agriculture Committee members have agreed with Behnam that the CFTC should take a larger role.
Individual investors are involved in markets that are overseen by the U.S. Securities and Exchange Commission. SEC Chair Gary Gensler said he expects his agency to be primary regulator because he considers most of the criptocurrencies to be securities.
The hearing could provide a first look at whether the FTX blowup changed lawmakers stances on how to set up a framework for criptocurrency regulation.
The House Financial Services Committee is set to hold the first in a series of meetings on December 13 and will look at FTX's downfall in several congressional hearings this month.
The committee expects to hear from Bankman-Fried, FTX and its affiliated trading firm Alameda Research, as well as Binance.