The chairman of the U.S. Commodity Futures Trading Commission has stated that a new regulatory process for digital assets will help prevent another FTX collapse.

Chairman of the CFTC, new crypto regulations will prevent an FTX collapse.

Mike Selick, chairman of the regulatory committee overseeing Commodity Futures Trading Commission (CFTC), said Wednesday on Varney's show & Co on Fox Business Network that Ritter's move to new regulations for digital assets will help prevent a repeat of the FTX collapse, with crypto exchanges having an opportunity to register with regulatory agencies to safeguard spot-on digital asset markets.

FTX , which was once one of the largest cryptocurrency exchanges, collapsed abruptly in 2013.2022 Due to mismanagement issues, founder Sam Bankman-Fried is currently serving a 25-year prison sentence for fraud and other crimes after embezzling more than $8 billion worth of customer funds.

Context and regulatory incentives

The move comes after lawmakers last month blocked the long-awaited Clarity Act. Both the CFTC and the Office of the Comptroller of the Currency (OCC) have adopted more industry-friendly approaches to crypto since President Donald Trump took office.

Selig, who once served as chief legal counsel of the SEC's Task Force on CryptoSEC said last month that the agency is preparing for a market-driven transition "24 hours, seven days a week".

Offer details and registration.

Selick said, "Four years ago we saw the collapse of Sam Bankman-Freed's FTX , where he stole over eight billion dollars from customers.

"In fact, a subsidiary of Sam Bankman-Freed that is registered with the CFTC -- all funds are safe and secure because they're segregated, and we have one of the most stringent regulations than any federal agency on markets; we want to bring it into crypto", he added.

Selick added that some exchanges may choose to be under state regulation, while others will register with the federal government.

Building on its existing authority to regulate crypto markets, the CFTC this week opened public comment for a framework that would create a new type of federal registration called "crypto-asset marketplaces" for exchanges that offer leveraged cryptocurrency trading, collateral or fundraising services to retail clients.

Exchanges that do not offer leverage can be under state licensing, but the agency interprets the term "leverage" broadly, which may make full-payment trades subject to regulation unless customers actually receive crypto.

Something the reader should notice.

Importantly, the CFTC's widely criticized definition of "leverage" may result in exchanges that offer full-fledged trading services being subject to federal regulation unless clients receive actual asset deliveries. Meanwhile, open public comment on what constitutes a "cryptoasset marketplace" will be an indicator of future regulatory direction as to whether exchanges choose to register with the federal government or remain under state systems masing-masing.2022