CFTC Chair Mike Selig Says Crypto Framework Would Guard Against FTX-Style Fraud

CFTC Chair Mike Selig said a proposed federal crypto oversight framework would protect exchange customers from fraud, market manipulation and the misuse of customer funds, aiming to prevent another FTX-style collapse.

The framework would establish federal oversight for crypto exchanges and introduce market-based regulatory mechanisms, Selig said. Its focus would include protecting customers from losses caused by fraudulent conduct and improper handling of funds.

Selig also warned that critics who oppose the proposal and favor maintaining the current system could, in practice, benefit fraudsters, market manipulators and people who take customer money. He said a lack of effective oversight could create an opening for another figure like Sam Bankman-Fried.

The proposal places customer protection at the center of the CFTC’s effort to define federal rules for crypto trading platforms.