– CFTC Commissioner Kristin Johnson urges Congress to expand the CFTC’s authority to review crypto acquisitions.
– Johnson made the call in a speech at Duke University, advocating for regulation that formalizes the obligation to separate customer property and introduce effective governance and risk management controls.
– Following the collapse of FTX in November, the speech highlighted the need for more robust regulation of the crypto industry to prevent the next crypto crisis.

Following the collapse of the crypto exchange FTX in November, Commodity Futures Trading Commission (CFTC) Commissioner Kristin Johnson has called on Congress to expand the U.S. agency’s authority to conduct due diligence on any firm seeking to acquire a minimum 10% share of the equity interest in a CFTC-registered market participant. Johnson made the call during a speech at Duke University on Wednesday, highlighting the need for more robust regulation of the crypto industry to prevent the next crypto crisis.

Johnson stated that the old regulatory frameworks, like antitrust legislation, may not be enough to prevent future events like FTX’s implosion. She specifically advocated for regulation that formalizes the obligation to separate customer property, ensure financial resource requirements, and introduce effective governance and risk management controls. As an example, she drew from the case of LedgerX, a CFTC-registered derivatives clearing organization.

Johnson further urged Congress to modify several pieces of proposed digital asset legislation to expand the CFTC’s authority. She noted that the agency needs to be able to review transactions involving crypto acquisitions to ensure that firms are not engaging in practices that could harm customers or the overall stability of the industry.

In addition, Johnson noted that the CFTC should have the authority to review transactions involving crypto acquisitions to ensure that the firms involved are properly managing risk. She stated that the agency should also be able to review the financial resources available to the firms, as well as their internal governance and risk management controls.

The speech comes as the crypto industry is facing increased scrutiny from regulators and lawmakers alike. Johnson’s call for expanded authority for the CFTC is likely to be welcomed by those looking to ensure the safety of their investments in the space. As the industry continues to grow, the need for robust regulation and oversight is becoming increasingly apparent.