Crypto Regulations in the US Are Not Clear, the Risk of Bankruptcy of Crypto Exchanges Like FTX Still Exists

JAKARTA - The crypto asset market in the United States (US) is still facing the risk of a crisis like that experienced by FTX, one of the crypto derivative exchanges that failed last year. This was conveyed by Rostin Behnam, Chairman of the US Commodity Futures Trading Commission (CFTC), at a conference at Georgetown University.

Behnam emphasized the need for immediate and comprehensive crypto regulation to protect investors and maintain financial stability. Behnam is not new to proposing crypto regulation in the US.

Since a year ago, he has been urging the US Congress to create a crypto regulatory framework, as he testified before the Senate Banking Committee. However, until now, Congress has not passed a law that could regulate the growing crypto market.

Even so, drafting crypto laws is not an easy matter because the crypto market has complex and dynamic characteristics. A number of draft laws (RUU) have been proposed by members of parliament, but none have been passed.

The two bills that have attracted the most attention are the bill regulating stablecoins and the bill providing a general framework for crypto regulation. These two bills have passed the US House of Representatives Financial Services Committee, but still have to receive approval from the House and Senate.

In addition, there is also a bill that aims to prevent the use of cryptocurrencies for illegal activities, such as money laundering and sanctions evasion. Behnam said these legislative efforts appear to have no clear direction or priorities, reflecting a lack of agreement or interest among lawmakers. As a result, the crypto market still operates without clear regulations, which increases the potential for a crisis.

Behnam emphasized that the CFTC and other regulatory bodies need clarity regarding their authority and responsibilities in regulating crypto markets. According to him, the CFTC only has limited authority to supervise digital commodity markets, and needs legislative empowerment to do its job better. Without laws governing the crypto market, the CFTC and other financial regulatory bodies cannot address the risks that exist in the crypto market.

Until now, the legislature is still experiencing deadlock in drafting crypto regulations in the US. Behnam said he is not only concerned about past events like what happened to FTX, but also future events that could disrupt the crypto market.

He said that there needs to be a balance between promoting innovation in the new digital currency space and ensuring investor protection and market integrity. This is a major and unresolved challenge for lawmakers and regulators like the CFTC.