Better Markets filed a comment letter to the Commodity Futures Trading Commission (CFTC) in response to the agency’s request for comment on FTX’s proposal to offer non-intermediated, margined clearing of Bitcoin futures products. Better Markets raised serious concerns over the proposal and asked the CFTC to use “extreme caution in evaluating it.”

Better Markets asked the tough questions about a bill introduced that was heavily supported and lobbied for by the crypto industry.

“The bipartisan crypto bill with the Orwellian name of ‘Responsible Financial Innovation Act’ released today will likely result in crypto being largely unregulated, even though it is an extremely volatile financial product with a limited track record, which itself is mostly bad.  Worse, it appears to be designed to disarm the public by making them think crypto will be properly regulated while the industry and the insiders know that is simply not true.”

The Washington Post reported that legislation introduced in Congress would require the Fed to give crypto banks access to its payment rails.

“Dennis Kelleher, president of the nonprofit Better Markets, which advocates stricter financial regulation, said the details will matter, but the approach “would likely be the worst of all worlds,” granting crypto firms access to the Fed’s payment infrastructure “without the regulations imposed on banks. The result would be the appearance of protecting taxpayers and the financial system but not the reality.”

The Financial Times Tech Tonic podcast covers the crypto lobby’s enormous influence in its series “A sceptic’s guide to crypto.” They spoke with our Dennis Kelleher about the stunning amount of money being spent and how it could impact our entire financial system.

Bloomberg called the acquisition of FTX by Binance “unlikely” due to the poor state of FTX’s finances. Bloomberg also reported that the United States Securities and Exchange Commission and Commodity Futures Trading Commission were investigating the nature of FTX’s connections to Bankman-Fried’s other holdings and its handling of client funds.

FTX announces its not processing withdrawals.

Wall Street Journal: SEC, DOJ Investigating Crypto Platform FTX

“It’s past time that the SEC brought charges against these exchanges for facilitating the trading of unregistered securities,” said Dennis Kelleher, president of Better Markets, a group that advocates for oversight of the financial sector.

The Atlantic: “Why is the contagion so limited? I asked that question of Dennis Kelleher, a co-founder of Better Markets, a nonprofit that advocates for financial regulation in the public interest. ‘The only reason we do not currently have a financial crisis, with a crash and with bailouts, is because regulators have withstood enormous pressure to allow interconnection and linkages between the crypto activities and the core of the financial and banking system.’”

During the panel, Dennis Kelleher focused on the revolving door of the crypto industry and the need to prevent the lawless crypto industry from infecting the entire banking system and economy.

Better Markets Press Release: The CFTC’s Ready, Shoot, Aim Approach to Legislation Should be Rejected

We need to talk about the CFTC

Yes, the CFTC might not have been able to prevent the FTX debacle. Frauds happen. But the agency has consistently acted as a friendly champion of a fraud-riddled dumpster fire it purportedly wants to supervise. As Dennis Kelleher of non-profit investor advocacy group Better Markets put it in a recent report: . . . Rather than aggressively regulating crypto and skeptically scrutinizing its claims, the CFTC has spent most of its time cheerleading the industry and trying to expand its jurisdiction rather than worrying about investor, customer, and markets protections.

Better Markets Blog Post: FTX’s Penetration of the CFTC by a Revolving Door Hiring Spree of Former CFTC Officials