Push for New Crypto Rules Will Stop FTX-Style Repeat, CFTC's Selig Says

Crypto-friendly regulator Mike Selig has said that going ahead with new rules will prevent a repeat of the FTX collapse.

In a Wednesday appearance on Fox Business Network’s “Varney & Co.”, the Commodity Futures Trading Commission chair said crypto exchanges would have the opportunity to register with the agency, helping safeguard digital asset spot markets.

In 2022, FTX, once a leading crypto trading venue, went bust quickly and without warning amid mismanagement. Sam Bankman-Fried, the exchange’s founder, is currently serving 25 years for fraud and additional crimes following the theft of $8 billion in customer funds.

The long-awaited Clarity Act was blocked by lawmakers last month, but the CFTC and other regulators continue to push ahead with crypto rulemaking.

Selig said: “Four years ago, we saw the collapse of Sam Bankman-Fried’s FTX, where he stole over $8 billion in customer funds. That can’t happen under our regime.”

“Actually, Sam Bankman-Fried’s subsidiary that was CFTC registered, all the funds were safe and secure because they were segregated, and we have some of the most stringent requirements of any federal agency when it comes to markets — we want to bring that to the crypto world,” he added.

According to Selig, certain exchanges may stay under state-level regimes, and others would become federally registered.

The CFTC is using powers already at its disposal to oversee crypto markets. This week the agency requested public comment on a framework for a new federal registration category called a “crypto asset market,” covering exchanges that offer leveraged, margined or financed crypto trades to retail customers.

Exchanges without leverage offerings could keep their state licenses. But because the CFTC defines “leverage” expansively, even trades that have been fully paid for could be pulled under its oversight unless customers accept delivery of their crypto.

Selig, previously chief counsel at the SEC’s Crypto Task Force, said last month the regulator was readying itself for markets to move “24-7, on-chain.”

Since U.S. President Donald Trump assumed office, both the CFTC and the SEC have taken a friendlier stance toward crypto industry regulation.