Crypto Industry Leaders Must Step Up, DOJ Says

It falls on the good actors to represent the industry well, DOJ’s Sanjeev Bhasker said


Source: Dall-E


In the wake of what some say is the crypto industry’s biggest setback ever, US officials this week said there’s now a heightened diligence and risk burden on crypto companies still standing. 

Regulators need the industry’s expertise when it comes to ensuring companies are acting within existing crypto guidelines, according Sanjeev Bhasker, digital currency counsel of the Digital Currency Initiative at the Department of Justice. 

“You are the first line of defense…when it comes to pride and protecting the community,” Bhasker told members of the Blockchain Association, a digital assets lobbyist, at the Policy Summit in Washington. 

Lawmakers can only do so much when it comes to protecting consumers, Rep. Jake Auchincloss, D. Mass., agreed

“Investors need to be doing much more due diligence,” Auchincloss said at the event, referring to venture firms and additional equity holders who backed the now-defunct exchange FTX

It falls on good actors to represent the industry well, Bhasker added — and, especially, the need for industry participants to remain vigilant.

“We encourage the private sector industry to self-regulate,” Bhasker said. “When you see issues of fraud and suspicious activities, report it.” 

In terms of what to expect from the Hill in the coming months, Auchincloss is hopeful several of the current proposals can make it through one way or another. But, Auchincloss added, it is important to note that FTX’s fraud was never permissible, even under current regulations. 

“The crimes FTX was committing…were illegal 100 years ago,” Auchincloss said. 

Regulatory guidelines have already proven to work as consumer protection measures, CFTC Commissioner Kristin Johnson said at the conference, pointing to FTX subsidiary, LedgerX, FTX US Derivatives. 

The firm is notably absent from the bankruptcy filing, Johnson said, 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). 

The CFTC has independently confirmed 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.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.


Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2023

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research Report Cover Vertex.jpg


The proliferation of new perp DEXs has led to fragmented liquidity across various DEXs and chains. Vertex, known for its vertically-integrated DEX that includes spot, perpetual, and integrated money markets, is now tackling cross-chain liquidity fragmentation through horizontal integration with the launch of new Edge instances. Vertex's integrated offerings and cross-margined account structure amplify the benefits of new instances: native cross-chain spot trading, optimized cross-chain basis trading, consistent interest rates, reduced bridging friction, and more.


Partnering with EtherFi and Angle, the fully on-chain perp DEX features bespoke collateral



Gavin Wood introduced the next evolutionary step for the Polkadot network: the Join-Accumulate Machine, or JAM


The side events were the places to be at Consensus 2024, according to attendees


Also, who’s come out swinging in the spot ether ETF fee war — and who could undercut them


I know it is not in their nature, but US regulators could learn a lot by researching the digital asset frameworks that overseas regulators have already gotten right


Also, the ETF hype train can count out at least one member