Rostin Behnam, the chairman of the Commodity Futures Trading Commission, said he was very encouraged that Congress is making moves to grant his agency more authority over digital asset markets.
The CFTC is typically considered to be a friendlier option than the US Securities and Exchange Commission (SEC) to lead oversight of the crypto industry. Currently, the Commission is involved in certain political issues related to cryptocurrency exchanges. However, it is waiting for Congress to define its eventual responsibilities. CFTC chairman Behnam pointed at the recent collapse of TerraUSD (UST) and said its failure showed the need for regulation of stablecoins and the cryptocurrency sphere at large. Millions of investors could continue to lose their funds if the situation isn't brought under control.
According to the latest reports, the US Securities and Exchange Commission has already begun its investigation into the failure of Terraform Labs and its TerraUSD stablecoin. The UST token, which lost its peg to the US dollar in early May, quickly lost value and crashed alongside the Terra (LUNA) cryptocurrency. Both coins were created by Do Kwon, CEO of Terraform Labs, who launched LUNA 2.0 afterwards.
The SEC would analyze whether UST's marketing before the crash violated federal investor protection laws. The Commission would also investigate if Terraform Labs violated laws on securities and investment products.
Earlier, US Secretary of Finance Janet Yellen said that regulating stablecoins was a matter of urgency. She was supported by SEC chairman Gary Gensler.
Do Kwon, the founder of TerraLabs, is also facing scrutiny in his native country of South Korea. A group of South Korean investors filed a class action lawsuit against Kwon, as well as Terraform Labs and one of its co-founders. Seoul police are probing allegations of embezzlement at the company, amid speculation that Do Kwon sold more than $20 million before the crash.
The crypto market has failed to recover after May's events and continues to tumble. There are no traders willing to go long on BTC in the short term, even at the current lows. Bulls would have to send bitcoin above $21,700 to regain the initiative. To ease investor concerns, the cryptocurrency must settle above the $22,000-21,700 range. If BTC breaks below $20,700 and settles there, it would then sink towards the low at $19,200. From there, it could dive towards $18,500 and $17,600.
Ethereum investors remain on edge after ETH nearly touched the psychological level of $1,000. Few market players are willing to buy the dip in this situation. If ETH breaks above $1,170, it could then go into an upward correction and quickly return to $1,282 and $1,406. An uptrend would only be possible if Ethereum settles above these levels. It could then hit the highs at $1,548 and $1,721. If ETH remains under pressure, it could move towards the closest support at $1,072, where long positions could be opened. A breakout below this level would send Ethereum downwards to $997, as well as the new lows at $925 ad $876, where major market players would come into play once again.
