Commodity Futures Trading Commission (CFTC) officials are considering whether to ban the use of derivatives to bet on the outcome of the U.S. presidential election. Derivatives are investments based on the value of an underlying security, asset group, or benchmark, such as stocks, bonds, commodities, index funds, and cryptocurrencies.
CFTC Chairman Rostin Behnum sat with Yahoo Finance's Brian Sozzi, Akiko Fujita and others at the 2024 Milken Conference to discuss fraud and manipulation that his agency could jeopardize the election. We will discuss this proposal as we aim to prevent this.
“We obviously have issues surrounding election integrity, and those allegations have been coming up over the last several years, and if there are issues surrounding an election, whether it's at the local level or the state level, They could become involved in civil enforcement actions in the context of elections,' or at the federal level,'' Behnum explains. “We play an important role in terms of risk management and price discovery, and we hear from many people how they benefit from these prediction markets.But there are many other things outside of elections that also benefit from these predictions. There are ways to take advantage of the market…the commission says, but it remains to be seen.
In March, former FTX CEO Sam Bankman Fried was sentenced to 25 years in prison for defrauding the cryptocurrency exchange's investors, customers, and lenders. Additionally, Binance founder Changpeng “CZ” Chao was sentenced to four months in prison as a result of a plea deal with US authorities related to money laundering charges.
Benham acknowledged that there has been a significant increase in suspected fraud in the crypto space, and said that in 2023 “nearly 50% of enforcement documents” would have to be allocated to “exchange, “That's a staggering statistic for a derivatives regulator that oversees trillions of dollars in credit, agriculture and other markets.” , energy, metals, and interest rates as well. ”
“The fact that we have to allocate 50% of our enforcement resources to unregulated markets is, again, an alarming statistic. I think it shows that there is strong regulation.''To eliminate this kind of fraud and manipulation, we need a traditional regulatory framework. ”
See more of Yahoo Finance's coverage of the 2024 Milken Institute Global Conference.
This post was written by luke carberry morgan.
