CFTC Commissioner: Too Soon To Say if FTX Crisis Was Intentional

One FTX subsidiary is notably absent from the bankruptcy filing, the commissioner pointed out

article-image

CFTC Commissioner Kristin Johnson | Photo by Tracie Morris Schaefer for Tulane Law

share

When it comes to unpacking what exactly happened to now-bankrupt crypto exchange FTX, it’s far too soon to tell what risk management or regulatory errors were made — if any — a CFTC commissioner said Wednesday.

As mounting damage from FTX’s failures percolates, Commissioner Kristin Johnson said if regulators determine there was wrongdoing, it would still be another question entirely of whether they were intentional in nature. 

“We’re in the early days and beginning to peel back the layers of what’s happened, so I would feel remiss to begin to describe what I think are regulatory missteps or even risk management failures,” Johnson said during an appearance before lawmakers and industry members at the Blockchain Association Policy Summit in Washington. 

It is not yet fair to make the determination that the FTX team knowingly and willingly made mistakes when it comes to risk, according to Johnson.

“It’s hard at this point to distinguish, from this distance, risk management failures from something more intentional,” she said. “The outcome will be the same…The result is a liquidity crisis, but there are many ways a liquidity crisis will be triggered.” 

Even so, Johnson added, regulatory guidelines have been proven to work as consumer protection measures. 

One FTX subsidiary, LedgerX, known as FTX US Derivatives, is notably absent from the bankruptcy filing, Johnson pointed out, in part thanks to their due diligence in complying with the futures watchdog’s regulatory requirements. In 2017, LedgerX applied to register with the CFTC as a derivatives clearing organization (DCO). 

“We require, in permitting LedgerX to operate, that LedgerX comply with a number of conditions,” Johnson said. “LedgerX agreed that it would only offer fully collateralized contracts. 

The CFTC has independently confirmed that LedgerX does not belong on the list of FTX bankrupt subsidiaries, Johnson said. 

“Not $1 of customer assets have been compromised, to the best of our knowledge,” Johnson said of LedgerX.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

Ethena Labs is leaping from its flagship synthetic dollar, USDe, to a full product suite—USDtb, iUSDe, and the Arbitrum-based Converge Chain—designed to marry crypto-native yields with TradFi-grade compliance. Our analysis shows how expanding into CME, ETF options, and tokenized Treasuries could lift protocol revenue from sub-$500 million in a bear case to several billion dollars if favorable regulation and institutional adoption align.

article-image

The L1’s Interwoven Stack is the most opinionated tech stack yet

article-image

Bitcoin is still rising, 11 years after the documentary film The Rise and Rise of Bitcoin

article-image

Arch Labs CEO told Blockworks that the team plans to launch a native token, but declined to give details

article-image

CEO Mike Silagadze tells Blockworks that the US is “open for business” and why its DeFi bank offering is the first of many

article-image

Doing one thing well and leaving everything else out is often what disruptive technologies do best