The cryptocurrency exchange platform FTX’s proposal will be discussed in a Congressional meeting on May 12.
Yesterday, The House Agriculture Committee scheduled a hearing for “Changing Market Roles: The FTX Proposal and Trends in New Clearinghouse Models”.
The proposal from FTX disintermediates derivatives trading, meaning that the platform would directly clear its customers’ margin-backed swaps trades. FTX says the proposal would help reduce friction and free up capital. It would also allow users to use their spot crypto holdings as collateral for margin trading.
The proposal is being reviewed by The Commodity Futures Trading Commission, (CFTC) which comes under the purview of the Agriculture Committee.
Also Read: CFTC Extended Public Comment Deadline for FTX US Derivatives
Rep. David Scott (D-GA), chairman of the Agriculture Committee, feels that this move is too risky. On the other hand CFTC Chairman Rostin Behnam feels that the proposal “could end up leading to more efficient trading execution, less risk in the system.”
The witness list for the meeting at 10 AM, next week is not yet available, however the hearing is likely to be contentious.
The CTFC will also hold a roundtable discussion on May 25 to consider FTX’s proposal. The Chicago Mercantile Exchange (CME) has decided to oppose the exchange’s proposal.
