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The agriculture committee’s chairwoman, Sen. Debbie Stabenow, has authored legislation that would give the CFTC regulatory power over the crypto industry. Sam Bankman-Fried, who has resigned as the chief executive of FTX, was a supporter of the legislation.

The hearing “will be crucial to assessing the future of this legislation and whether it still has the similar, strong bipartisan support it did prior to the recent crisis,” Beacon Policy Advisors wrote in a note on Monday.

With crypto largely unregulated, there’s fierce debate in Washington about which agency should oversee the industry. Some consumer advocates, as the Washington Post noted earlier this week, say the CFTC is too lenient and less prepared than the Securities and Exchange Commission to police digital currencies. The SEC’s chairman, Gary Gensler, has called the Stabenow bill “too light touch.”

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Stabenow, a Michigan Democrat, defended her bill at the hearing, saying it was “designed to prevent” situations like the FTX blowup. Sen. John Boozman, an Arkansas Republican who co-sponsored the measure, said he remains committed to advancing it and that the CFTC is the “right agency” to regulate digital commodities. Boozman told reporters in an interview, however, that he doesn’t expect the bill to move until next year.

The bill does not appear to be in for smooth sailing in a divided Congress. Stabenow’s fellow Democrat, Sen. Elizabeth Warren of Massachusetts, told Semafor this week that the CFTC “has no experience in investor protection which makes them the worst possible candidate for regulating a financial product that has been used to rip off millions of people.” And Rep. Patrick McHenry, the North Carolina Republican set to chair the House Financial Services Committee next year, said in a statement to the same publication: “The actions of FTX and Alameda Research should also serve as a warning to Congress that we cannot allow this industry to pick its own regulator.”

Behnam at the hearing bristled at the notion that his agency was lenient, saying: “we’re the farthest thing from a light-touch regulator.”

The CFTC chairman told lawmakers that he met with Bankman-Fried or his staff 10 times over the past 14 months, to discuss an FTX proposal about crypto derivatives trading. That application was pulled on Nov. 11.

Thursday’s hearing is one of at least two scheduled on the FTX debacle. On Dec. 13, the House Financial Services Committee is planning its own hearing on the FTX collapse’s consequences for digital assets.

FTX’s bankruptcy has hit an already battered crypto market, sending bitcoin
BTCUSD,
-0.78%
prices to a two-year low.

In addition to FTX, a number of major players in crypto have collapsed this year, including blockchain Terra, hedge fund Three Arrows, broker lender Celsius, and most recently BlockFi. Earlier this year, FTX extended a $400 million credit facility to BlockFi, with an option to acquire the digital-asset lender for $240 million.

Frances Yue contributed to this article.