FTX Plan to Attend the CFTC Roundtable Next month

According to a source familiar with the Commodity Futures Trading Commission (CFTC), the FTX proposal for clearing direct trades of derivatives customers will be heard at an informal hearing on May 23.

With the 60-day public comment period coming to an end on May 11, the U.S. regulator will invite representatives of the company and others who have a stake in the decision to a public roundtable, said the person, who spoke on condition of anonymity because the event hasn’t yet been announced. The public roundtable will allow for both proponents as well as critics to comment without the need for a hearing.

Steven Adamske, a spokesperson at the CFTC declined to comment. A FTX official was also unavailable for comment.

Rostin Benhnam, Chairman of RostinBehnam, has stated that his agency takes a cautious approach when considering applications from FTX.US to allow its trading platform to directly clear derivatives that are backed by margin. He said that the application could be one of many and that if approved, could have significant implications. The industry, though, has been optimistic about the tone Benham struck at a recent Congressional hearing.

“This proposal could end up leading to more efficient trading execution, less risk in the system,” Behnam told lawmakers last month at the House Agriculture Committee, adding that he’s required to foster “responsible innovation,” and FTX’s idea wouldn’t seem to violate commodities laws.

The CFTC had more than 20 roundtables as it tried to set up new rules to prevent a similar to the 2008 financial crisis. This time, the agency is weighing the key crypto matter with a new slate of commissioners – four members having been sworn in during March and April after recent Senate confirmations.

The agency has already received dozens of comment letters, such as one from the founders of BlockTower Capital, who argued that FTX’s idea “will reduce the over-reliance on the current gatekeepers to trading markets.” The comment period, however, runs for three more weeks, and the proposal is expected to have critics among more established exchanges.

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