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CHICAGO — A reckoning over the collapse of FTX has been under way for the last two days in a hotel overlooking the Chicago River, where the adults of Wall Street and Washington have been asking themselves a simple question: Did we just get taken for a ride?

“We’re all probably struggling with that right now,” Commodity Futures Trading Commission Chair Rostin Behnam said Monday at the Futures Industry Association’s annual Chicago conclave while responding to a question from the audience about whether the industry “missed something big” in FTX.

Sam Bankman-Fried, the founder of now-bankrupt cryptocurrency exchange, loomed large here last November. Clad in an FTX-branded tee shirt and shorts, Bankman-Fried captivated the room of suited-up financiers, regulators and journalists, most of whom were still novices to the wild crypto markets where the then 29-year-old was setting up an empire.

One year later, FTX is dead — leaving finance executives, venture capitalists, lawmakers, journalists and plenty of others at and beyond the FIA conference at the Sheraton Grand Chicago Riverwalk wondering what they missed.

Federal authorities and regulators are already circling FTX and Bankman-Fried. In the meantime, though, many executives and regulators throughout the FIA conference in Chicago are unequivocal that Washington needs to get involved — and fast.

Behnam said Congress needs to act “urgently” to establish a new crypto regulatory framework. New legislation, he said, could address some of the concerns about conflicts of interest, the commingling of customers’ funds and a lack of transparency in the company’s books that are bubbling out of FTX.

The saga is also bound to amplify questions about the ability of crypto exchanges to fashion themselves like turduckens that offer the services of an exchange, brokerage, clearinghouse and much more to customers — something that Securities and Exchange Commission Chair Gary Gensler and Behnam have both called out before.

“It’s kind of an earthquake in cryptoland,” said Jamil Nazarali, a long-time Citadel Securities executive who now leads upstart crypto exchange EDX Markets, of the downfall of FTX. “In the short term, it’s probably going to prolong the crypto winter. But it validates that exchanges should not be holding customers’ coins and that they shouldn’t be trading with them. You need to have that separation, which is a big part of why we are building EDX Markets.”

Yet, Intercontinental Exchange CEO Jeff Sprecher, whose business covers a mix of different SEC- and CFTC-regulated markets, questions why regulators haven’t already been more proactive in policing the space.

"I've always found it odd that the regulators haven't used the existing rules a little more aggressively," Sprecher said. "They certainly aren't shy with us."

IT’S WEDNESDAY — Congrats to those of you who made it through the Ticketmaster gauntlet and scored Taylor Swift tickets. Have tips, story ideas, feedback or favorite Taylor lyrics to see us through this hump day? You know what to do: [email protected] and [email protected].

Retail sales data released at 8:30 a.m. … Industrial production data released at 9:15 a.m. … New York Fed President John Williams speaks at Treasury market conference at 9:50 a.m. … Banking regulators testify before the House Financial Services Committee at 10 a.m. … Fed Governor Christopher Waller speaks at 2:35 p.m.

TWEET OF THE DAY — Bloomberg’s Conor Sen proposes a new Taylor Rule.

ONCE BITTEN, TWICE SHY, THRICE LOSER — Bloomberg’s Flavia Krause-Jackson: “Citadel’s billionaire founder, Ken Griffin, called Donald Trump a ‘three-time loser’ and said he hoped the former president would ‘see the writing on the wall’ and not run for the White House again, making way for Florida Governor Ron DeSantis.”

INVESTIGATE ELON? NAH — Our Kelly Garrity: “Treasury Secretary Janet Yellen does not see a reason to investigate Elon Musk’s purchase of Twitter, she told CBS News in an interview Tuesday. ‘We really have no basis — to the best of my knowledge — to examine his finances of his company,’ Yellen told CBS News chief White House correspondent Nancy Cordes.”

MORTGAGE MARKET CUSHION — WSJ’s Andrew Ackerman: “A federal housing agency on Tuesday said its financial reserves have reached record levels and that it was well positioned to weather a mortgage-market downturn. The audit, released by the Federal Housing Administration on Tuesday, likely gives officials room to trim mortgage costs over the coming months as part of a push by the administration to address housing affordability.”

EXTENDERS ALERT — Sen. Ron Wyden (D-Ore.) predicted that a package of retirement-related tax provisions would be approved in the lame-duck session of Congress, our Brian Faler reported.

What about a Child Tax Credit expansion? “There’s going to be a clear debate about tax choices, and this whole issue of the Child Tax Credit is front and center in that discussion,” said Wyden, outlining his priorities for the post-election session of Congress.

BLUMENAUER, LEE REQUEST FINANCIAL SERVICE EQUITY DATA — From our Natalie Fertig: “Cannabis Caucus Co-Chairs Barbara Lee (D-Calif.) and Earl Blumenauer (D-Ore.) want the Financial Crimes Enforcement Network to give them data on financial services offered to minority cannabis businesses. In a letter shown exclusively to POLITICO, Lee and Blumenauer asked FinCEN for the number of depository institutions providing services to weed businesses, and a demographic breakdown of weed businesses that received financial services like banking in 2021. It isn’t clear whether the data will have any effect on legislation that could pass during the lame duck, but the hope is that it could impact future cannabis-related bills.”

MORE FTX FALLOUT — Our Zach Warmbrodt and Eleanor Mueller: “The crypto meltdown triggered by digital currency exchange FTX is spurring bipartisan calls for legislation to set rules for the industry — but at least one powerful lawmaker is urging caution. Senate Banking Chair Sherrod Brown (D-Ohio) — an outspoken crypto critic — said Tuesday that he’s eyeing a hearing on the FTX debacle and has been in touch with the Securities and Exchange Commission about the meltdown.”

FIRST IN MM — A key progressive group that had backed a crypto bill sponsored by Chair Debbie Stabenow (D-Mich.) and Sen. John Boozman (R-Ark.) might be having second thoughts: “We are extremely concerned with recent reports of suggested changes. We’ve always been clear that our support was dependent upon strong final bill text,” the Center for American Progress told MM in a statement. “Especially in light of recent events, we believe that the existing regulatory rules need to be enforced. The SEC, in particular, has very strong investor protection rules that cover much of the crypto industry and transactions. The SEC is in a good position to increase enforcement of existing rules.”

— Bloomberg’s Katanga Johnson, Lydia Beyoud, Allyson Versprille, and Annie Massa: “American and Bahamian authorities have been discussing the possibility of bringing Sam Bankman-Fried to the US for questioning, according to three people familiar with the matter.”

— Bankman-Friedclaimed on Twitter on Tuesday that his “one goal—is to do right by customers. I’m contributing what I can to doing so. I’m meeting in-person with regulators and working with the teams to do what we can for customers. And after that, investors. But first, customers.”

— The company plans to file a list of its largest creditors by Friday, according to its bankruptcy filings, which indicated there “there could be more than one million creditors.”

— Meanwhile, elected officials are starting to do everything they can to distance themselves from FTX’s political empire. In addition to Reps. Chuy García (D-Ill.) and Kevin Hern (R-Okla.), Rep.-elect Becca Balint’s campaign told the Vermont Digger that she’d donate a $2,900 campaign contribution she received from Bankman-Fried to charity.

FIRST IN MM — With crypto legislation in flux following FTX’s demise, Circle CEO Jeremy Allaire sent a letter to House Financial Services Chair Maxine Waters (D-Calif.) and ranking Republican Patrick McHenry (R-N.C.) – along with their counterparts in Senate Banking – urging them to move forward with negotiations on a bill regulating dollar-pegged digital assets known as stablecoins.

A $12M SCANDAL AT GOLDMAN — Bloomberg’s Sridhar Natarajan and Max Abelson: “Goldman Sachs Group Inc. paid out well over $12 million to a veteran executive who complained internally about a toxic workplace for women in the highest echelons of Wall Street’s most prestigious firm … the complaint alleged that [Chief Executive Officer David Solomon] once bragged to a gathering of male colleagues that he was probably the only one present who received oral sex the night before, the people said. … Solomon, 60, wasn’t the main focus of the complaint.”

DIGITAL DOLLAR — Our Victoria Guida: “The Federal Reserve Bank of New York on Tuesday said it is launching a digital dollar experiment with big banks that will explore the feasibility — both practically and legally — of using a shared ledger for interbank transactions.”

SPEAKING OF CRYPTO — Fed Vice Chair of Supervision Michael Barr on Tuesday said regulators should give banks more information about how they can safeguard clients’ cryptocurrencies, as agencies come under pressure to exert more oversight over digital assets, Victoria also reported.

THE WALMART EFFECT — FT’s Andrew Edgecliff-Johnson: “Walmart is gaining popularity with richer consumers looking for savings at a time of high inflation, boosting its third-quarter results even as it agreed to pay $3.1bn to states that had sued over its role in the US opioids crisis.”

OUT SICK — WaPo’s Abha Bhattarai: “A new round of viral infections — flu, RSV, covid-19 and the common cold — is colliding with staffing shortages at schools and day cares to create unprecedented challenges for parents and teachers. More than 100,000 Americans missed work last month because of child-care problems, an all-time high that’s even greater than during the height of the pandemic, according to new data from the Bureau of Labor Statistics.”

Nearly 55 million people in the U.S. are expected to travel for the upcoming Thanksgiving holiday, making it one of the busiest for travel in the past two decades. — WSJ’s Joseph De Avila

Britain’s job shortages showed no signs of easing in the third quarter as more people dropped out of work and wages grew at the fastest pace in over a year, adding to inflationary concerns for the Bank of England. — Bloomberg’s Andrew Atkinson and Phillip Aldrick

A maintenance and repair crisis is upending the role that France has long played as Europe’s biggest producer of nuclear energy, raising questions about how much its nuclear power arsenal will be able to help bridge the continent’s looming crunch. — NYT’s Liz Alderman