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Senator Kelly Loeffler to join CFTC oversight committee

Elliot Hill

Kelly Loeffler, former CEO of Bitcoin futures exchange Bakkt and new senator for Georgia, has been appointed to the Commodities and Futures Trading Commission (CFTC) oversight committee.

Loeffler will be part of the senate agricultural committee, which approves the CFTC’s chairman and commissioner nominations and decides whether the CFTC is reappointed as a federal regulator.

Bakkt, part of parent company Intercontinental Exchange (ICE), was launched in 2018 to provide futures trading for Bitcoin and other digital assets.

The CTFC has played an active role in Bakkt’s regulation, including the approval of physically-settled BTC futures contracts, which the regulator cleared in August 2019.

However, Loeffler’s recent appointment has caused some controversy, not least because of her prior involvement with the CFTC in negotiating the approval of Bakkt’s Bitcoin futures, but also because her spouse runs ICE.

Loeffler’s husband, Jeffrey Sprecher, also owns a minority stake in the exchange, thought to be around 1.1%.

According to the Wall Street Journal, concerns have been raised over the influence Loeffler now has over CFTC decisions, which may allow her to put pressure on the regulator in favour of her business interests.

Loeffler’s appointment as senator for Georgia was also a controversial matter, with Trump administration insiders, and Trump himself, calling for Doug Collins to take the position instead.

Some leading Democrats were also unhappy with Loeffler’s appointment, claiming at the time that she had bought her way into the role, possibly to leverage her position in favour of Bakkt and ICE.

Loeffler has denied these allegations, and took office on January 1 2020. She has since stepped down as Bakkt CEO.

Loeffler’s response

In her response to the WSJ, Loeffler claims there is no cause for concern regarding potential conflicts of interest and that she would comply with the senate’s ethics rules in both letter and spirit.

Discussing her plan for possible conflict of interest scenarios, Loeffler told the WSJ: “I will recuse myself if needed on a case-by-case basis.”

Nevertheless, with Loeffler’s spouse owning a $600 million equity stake in ICE, there are bound to be some doubts over the suitability of Loeffler for this role.

You can read more about the CFTC here.

 

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