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November 21, 2022

No One Should Be Pushing FTX Endorsed Legislation Putting the Underfunded CFTC in Charge of the Crypto Industry Before Knowing the Facts

The CFTC’s Ready, Shoot, Aim Approach to Legislation Should be Rejected

WASHINGTON, D.C.— Dennis M. Kelleher, Co-founder, President and CEO, issued the following statement in response to the Senate Agriculture Committee’s announcement of a hearing entitled “Why Congress Needs to Act: Lessons Learned from the FTX Collapse” on December 1, 2022:

“Before its collapse last week, FTX and its CEO Sam Bankman-Fried spent enormous amounts of money buying access and influence to get Congress to quickly pass its special interest legislation putting the smallest and least funded financial regulator, the CFTC, in charge of the complex, sprawling crypto industry.  FTX and its allies did that even though some proposed legislation gutted the SEC’s ability to properly police the capital markets, putting at risk the deepest, most liquid capital markets in the world at risk.

“The CFTC Chair de facto endorsed both these FTX endorsed bills and, next to Sam Bankman-Fried himself, appears to have pushed the hardest for them to be passed, including last week when he said legislation should be passed “no questions asked.”  This ready, shoot, aim approach to legislation should be rejected.  In light of the FTX’s collapse and the apparent loss of billions of dollars to investors and customers, reportedly due in part to potentially illegal if not criminal conduct, there are lots of questions that should be asked and answered before there is any legislation, especially legislation endorsed and pushed by FTX.

“There should be no rush to legislative judgment until the facts related to FTX are known, including the conduct of the CFTC regarding FTX and Sam Bankman-Fried as referenced here, here and here.  As highlighted by the bankruptcy trustee’s recent statements, it would be impossible in the near term to even know what happened at FTX.  Therefore, it will be impossible to know how any legislation might or might not have prevented what happened at FTX.  Any push to pass the FTX-endorsed bills would be a blind rush to judgment that would likely endanger investors, customers, and financial stability.”

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org

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