“After Show” Thoughts from My Coindesk TV Segment re: CFTC Chair’s Testimony About FTX at Senate Hearing

Today, I did a segment on Coindesk TV’s morning show, First Mover, with hosts Christine Lee and Lawrence Lewitinn. We discussed the CFTC Chairman’s testimony at the Senate Agriculture Committee hearing on the FTX demise and need for amendments to CFTC’s regulatory authority to increase its ability to regular crypto asset spot trading of digital asset commodities like bitcoin and ethereum.

FTX, one of the world’s largest cryptocurrency trading platforms, filed for bankruptcy earlier this month after a series of reports about its shoddy finances triggered a run on its books. FTX also lost billions of dollars in customer deposits on risky bets made by Alameda Research, an investment firm run by FTX founder Sam Bankman-Fried.


Summary of CFTC Chairman Benham’s Remarks:

  • noted that in the absence of stringent and uniform standards, the digital asset market rapidly expanded

  • we need to move quickly on a thoughtful regulatory approach to establish guardrails in these fast-growing markets of evolving risk, or they will remain an unsafe venture for customers and could present a growing risk to the broader financial system.

  • CFTC lacks the necessary and direct authority to write rules and to oversee this marketplace.

  • CTFC is more reactive than proactive due to constraints in the enabling legislation that created its regulatory authority. Instead, it can only reach the crypto market (or commodities market, more broadly) through more limited authority activated when fraud or manipulation has already occurred. By then, it’s already too late.

  • In the absence of direct regulatory and surveillance authority in an underlying cash market, CFTC enforcement activity begins with a referral or whistleblower tip from an external source.

  • Despite this limitation, the CFTC has brought more than 60 enforcement cases in the digital asset space since 2014, with total penalties of just over $820 million. In fiscal year 2022, more than 20% of our 82 enforcement actions involved digital assets.FN3CFTC asks Congress for Comprehensive regulation to protect customers on the front end by stopping fraud before it occurs.

  • He supports the Stabenow/Boozeman bill August 2022: Digital Commodities Consumer Protection Act (DCCPA) to amend the Commodity Exchange Act to provide the Commodity Futures Trading Commission jurisdiction to oversee the spot digital commodity market

  • Under the DCCPA, FTX would not have occurred. Main failures would have fallen within the core protections under this proposed law.Consumer protection is paramount, as well as consumer education of operating safely, legally and confidently in the new digital asset economy.Comes for VPNs, as well. What’s the impact on financial and information privacy?

Finally, Chair Behnam recommended that any legislative amendment strike the right balance to provide sufficient authority and guidance but not hamstring the agency from being able to shift and adjust and evolve with the market. The House Financial Services Committee Chaired by Maxine Waters will hold its own hearing on Dec. 13th, titled “Investigating the Collapse of FTX”.

Watch the hearing and download Chair Behnam’s prepared remarks here.


Book Professor Evans for Your Event or Training @ Gravity Speakers

can the law keep up with crypto?


Last week I explored this question with Verge podcaster Nilay Patel on his popular show DeCoder. Nilay explained:

A lot of Web3 ideas seem to run directly into the existing legal system in complicated and sometimes very funny ways. The NFT world seems to have an impressionistic understanding of copyright law. DAOs, well, they aren’t actually recognized as legal entities in most states. So in a very technical sense, they can’t actually do anything in the real world. But all these things still exist, and at some point, the law will have to catch up.

So, today, I’m talking to Tonya Evans, a law professor at Penn State Dickinson Law. She teaches IP law, copyright, and blockchain. She also hosts the Tech Intersect podcast, where she covers how law and technology intersect. She has spent a lot of time thinking about crypto assets and how they interact with the law. Tonya’s point of view is that we shouldn’t just abandon many of the legal frameworks we have today — she just wants them to adapt to this new internet.

Read the full transcript here.

Blockchain, Cryptocurrency & Law: an online key to unlocking the future of business, tech & law

Credit: WIPO

When I fell down the proverbial rabbit hole of the cryptocurrency and blockchain ecosystem, I had no idea I’d turn into part-expert, part-evangelist. But here I am. And because you found your way to this post, here you are too! So we are in great company.

Blockchain Education @ UNH Law

After spending the better part of every waking hour fully immersed in the space by writing, speaking and crafting a curriculum and program, we are starting to enjoy the fruits of our labor here at UNH Law in launching a host of innovative course offerings in partnership with iLaw Ventures (a BARBRI company).

Education about blockchain, cryptocurrencies and other crypto assets, is essential. This is especially true for entrepreneurs, law students, lawyers and business professionals, as the blockchain community continues to develop the infrastructure of Web 3.0.

Honored to be a part of the #blockchainedu build

Coindesk published a substantive article, written by Leigh Cuen, to highlight exclusive details about the UNH Law online certificate program. Cuen’s article also explored the state and, more importantly the future, of blockchain education, in general. Program details are noted below. But here is an excerpt from the article:

It’s not a bear market for everyone.

“A crypto winter for the price is a crypto summer for attorneys,” said Jason Civalleri, adjunct professor at the University of New Hampshire Law School. “As the price sinks, you have a lot of demand for legal services.”

That’s why UNH Law is rushing to offer a new certificate program in blockchain and cryptocurrency. As exclusively told to CoinDesk, over 100 students have expressed interest in the program, which will feature of slew of industry players as guest lecturers – including Hester Peirce of the U.S. Securities and Exchange Commission, Ethereum Foundation researcher Vlad Zamfir and MyCrypto CEO Taylor Monahan.

Read the full article: Lawyers Rush In: New UNH Blockchain Program Nabs Big-Name Speakers

About the BC&L Certificate Program

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