Crypto exchange FTX will be the subject of a Congressional hearing next week.
On May 5, the House Agriculture Committee scheduled a hearing for May 12 entitled “Changing Market Roles: The FTX Proposal and Trends in New Clearinghouse Models.”
The Commodity Futures Trading Commission, which the Agriculture Committee oversees, is currently reviewing a proposal from FTX that would disintermediate derivatives trading, among other changes to the cryptocurrency trading platform. FTX says the proposal would reduce friction and free up capital, while also allowing users to use their spot crypto holdings as collateral for margin trading.
Critics say the new format is too risky. Among those is Rep. David Scott (D-GA), chairman of the Agriculture Committee, who took aim at FTX’s proposal during a hearing with CFTC chair Rostin Behnam at the end of March. It was at that hearing that he took the unconventional move of announcing a future hearing focused on the FTX proposal.
The hearing next week is, consequently, likely to be contentious. A witness list is not yet available.
The CFTC is also holding a roundtable on disintermediation later this month, with the FTX proposal similarly in the spotlight. Chairman Behnam has, however, defended the proposal and the CFTC’s diligence in handling it.