Yahoo Finance's Jennifer Schonberger discusses news that the U.S. CFTC chair will be questioned over the FTX collapse.

Video Transcript

- Moving on today to what's going on in DC, the Senate Agriculture Committee meeting today in the first of several congressional hearings to examine FTX's failures. Members expected to press the chair of the Commodity Futures Training Commission Rostyn Benham on what can be done to change things. Yahoo Finance's Jennifer Schonberger has more on what we can expect from this hearing. There is legislation that has been proposed on this. But we haven't seen any movement on it, Jen.

JENNIFER SCHONBERGER: Good morning, Julie. Yeah. And that may be thrown into flux. To recap, the Senate Agriculture Committee holding the first Capitol Hill hearing on failed crypto exchange FTX with Commodity Futures Training Commission Chair Ralston Benham appearing as that sole witness. Senators expected to question the CFTC chair about the failure of FTX and how the CFTC plans to regulate trading crypto.

With FTX's failure, the pressure is on the CFTC, with questions over how Washington regulators have handled overseeing the cryptocurrency market riddled with bankruptcies. But lawmakers not expected to grill Benham on what the agency should have done. Rather, they will focus on what Benham thinks the agency should do going forward to protect investors and markets now. The panel's chairwoman Senator Debbie Stabenow and ranking member Senator John Boozman introduced a bill that would give the CFTC oversight of crypto trading instead of the much larger SEC.

Of course, FTX founder Sam Bankman-Fried and his company backed that legislation, though now raising questions about his influence over the bill and throwing that bill into question. Since FTX failed, the likes of Senator Sherrod Brown, who chairs the Senate Banking Committee, as well as SEC Chair Gary Gensler have criticized that legislation. So the pressure on Benham today to really show why the CFTC should regulate crypto and what the CFTC could do to protect investors. Back to you.

- Jen, while we have you here, the US House Financial Services Committee is set to also have a hearing that's going to be taking place on December 13. And that's really going to explore the collapse of FTX as well. From what you're hearing in Washington and inside the Beltway, is there kind of an acceleration in terms of the number of lawmakers that are really hot to trot on getting legislation through? And is it something that we can realistically expect to take place in this Congress or the next?

JENNIFER SCHONBERGER: It's really funny, Brad, because I think there's a lot of chatter going on. I had Senator Lummis on our air, who has put forth the most comprehensive legislation we've seen to date on crypto legislation. And she said we shouldn't have a knee-jerk reaction here. We shouldn't be in a rush. We should be careful and methodical about thinking through these rules and learning from what happened from FTX's collapse and applying that.

So she sees 2023 as the real year for legislation to go through. And I think that that thinking is probably correct. I don't think we'll see any legislation out in this lame duck session. But it will be mostly looked at for next year whether we see passage next year or even into 2024 obviously remaining the open question.

- Yeah. And 2024 being an election year. So we'll see exactly what takes place there. Thanks so much, Jen, for really breaking this down and continuing to track the hearings that are taking place today in Washington, DC.