"Nothing has changed" to prevent the possibility of another event like the collapse of former cryptocurrency exchange FTX, Rostin Behnam, chair of the Commodity Futures Trading Commission, said Nov. 15.
"Has anything happened in the last year that would sort of slow down the ability for that kind of fraud to occur again?" asked Emily Wilkins, Washington correspondent at CNBC, at Georgetown University's Financial Markets Quality Conference.
"Ultimately, the answer to that question is no, nothing has changed, and we could be in a position where another FTX-type event happens," Behnam responded.
On the other hand, "that exuberance that existed two or three years ago around digital assets correlated with, obviously, the pandemic (and) folks being home (with) a little extra cash in their pocket," he said. "And those price moves, that high volatility, that excitement — that certainly is gone."
"So, could an FTX-type event happen? I don't want to ever say never," Behnam added.
Behnam has been a long-time advocate for more regulation in the digital assets space, and he reiterated his position while speaking at Georgetown Nov. 15.
"There is a gap" in the marketplace, he said, as the CFTC does not have jurisdiction over certain digital commodity tokens.
The House Financial Services Committee and House Agriculture Committee advanced a bill in July that would give the CFTC more jurisdiction over the digital commodity market, which Behanm said accomplishes the goals that he has been "advocating and requesting for a number of years now."
That bill would give the CFTC new authority over digital commodity markets, while maintaining the SEC's authority over digital securities. It also directs both regulators to create joint rule-makings on the issue, and allows digital asset intermediaries to dually register with the SEC and CFTC.
However, "there's been a pause (in momentum for regulation) because I think there's a bit of skepticism and cynicism about the technology from some," while others are more bullish, Behnam said. "I think that friction is causing a little bit of inertia."
"There's obviously a lot going on in Congress these days … and for those reasons, these bills have been caught, I think, a little bit in a holding pattern," he added.