Commodity Futures Trading Commission (CFTC) Chairman Michael Selig is using the theft of more than $6.3 billion from Binance to press his case for bringing offshore cryptocurrency exchanges under federal supervision. In an appearance on CNBC on Friday (Oct. 30), he argued that the attack exposes gaps in exchange safeguards rather than a failure of blockchain technology.

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According to Selig, the breach “proves our exact point” about the need for the crypto market framework his agency outlined in October. He promoted a federal registration option that would subject offshore platforms to cybersecurity standards governing U.S. financial markets.

“The real issue here is that these are unregulated offshore exchanges, and they don’t have the same sorts of safeguards that we have in our financial markets here in the United States,” Selig said.

His comments sought to connect a record theft to a broader regulatory effort that has gained urgency since Congress failed to pass the Clarity Act, according to Decrypt. The legislation would have established a framework for much of the U.S. cryptocurrency market. With that effort stalled, the CFTC is seeking to use existing authority to bring exchanges into a federal supervisory structure.

The Binance incident illustrates the distinction between the security of a blockchain and the security of an intermediary holding customers’ assets. Selig said the attacker exploited a vulnerability he believed originated on an employee’s laptop, without breaking Ethereum or its smart contracts.

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