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- CFTC commission said it will be too early to give an opinion on risk management or regulatory faults of FTX.
- Regulatory policies have been made to function as consumer protection measures- Johnson.
- It is not so far fair to make up the mind that the bankrupt exchange’s team intentionally and readily made errors when it comes to exposure, as per Johnson.
Kristin Johnson statement
On Wednesday, a CFTC commissioner stated that when it is a matter of revealing what precisely happened to the now-bankrupt crypto exchange FTX, it will be very soon to give an opinion on risk management or regulatory faults were made, if there are any.
As increasing damage from FTX’s collapse oozes, CFTC Commissioner Kristin Johnson stated if regulators decide there was misconduct, there is still one more question of whether it was completely done on purpose.
“We are in the primevally and starting to decorticate the layers of what is done, so I would feel neglected to start to elaborate what’s inside my mind are regulatory blunder or even risk management collapse,” Johnson said at the time when she appeared before policymakers and industry persons at the Blockchain Association Policy Summit in Washington.
It is not so far fair to make up the mind that the bankrupt exchange’s team intentionally and readily made errors when it comes to exposure, as per Johnson.
“It is really very tough at this time to categorize, from this gap, risk management collapses from something which is done knowingly,” she explained. The result will be exactly the same… the outcome is a liquidity crisis, but there are several ways a liquidity crisis will be prompted.”
However, Johnson revealed that regulatory policies have been made to function as consumer protection measures.
An FTX branch, LedgerX, known as FTX US subordinate, is remarkably not present in the bankruptcy filing, Johnson highlighted, partially thanks to their assessment in agreeing with the futures overseer’s regulatory needs. Five years ago, LedgerX applied to list with the CFTC as a derivatives clearing organization.
“We need in giving permission to LedgerX to function, that LedgerX agrees with several conditions,” as per Johnson. LedgerX complied that it will only give completely collateralized contracts.
The Commodity Futures Trading Commission verified that LedgerX does not belong on the list of FTX bankrupt branches, Johnson said.
“Not $1 of customer assets have been meet each other halfway, to the best we know,” Johnson said of LedgerX.
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