U.S. Senate Banking, Housing and Urban Affairs Committee Chairman Sherrod Brown has called for a comprehensive regulatory framework for cryptocurrencies.” The recent crypto meltdown has made it clear that a comprehensive framework to regulate crypto products is needed to protect consumers and the financial system,” the senator said.
U.S. lawmakers want a comprehensive regulatory framework for crypto
U.S. Senator Sherrod Brown (D-OH), chairman of the Senate Banking, Housing and Urban Affairs Committee, spoke about crypto regulation Tuesday in his opening statement for a congressional hearing titled “Crypto Crash. Why Financial Safeguards Are Needed for Digital Assets.”
“The cryptocurrency industry has collapsed,” the congressman began, noting that the crypto market will lose $1.46 trillion in value by 2022 and crypto companies have cut over 1,600 jobs. The congressman elaborated.
As the value of crypto crashed last year, platforms began to collapse, creating more losses throughout the rest of the crypto ecosystem. The remaining crypto companies have had to stop withdrawing customers and people have been frozen out of their money.
While noting that the crypto contagion did not infect the broader financial system, the senator from Ohio said.” We saw a glimpse of the damage it could have done if crypto had migrated into the banking system.” He warned, ” This nightmare is far from over… We are still learning the full extent of the fallout from the FTX decay.”
Noting that “as these crypto companies filed for bankruptcy, regulators, and policymakers also learned how out of control some of those businesses were,” the senator stressed.
They were overleveraged and undercapitalized. They had no internal risk management. They were careless with their clients’ money; in the case of FTX, they used it to line their own pockets. Now millions of Americans’ money is trapped and they may never get it back.
“These crypto catastrophes exposed what many of us already knew. Digital assets – cryptocurrencies, stablecoins, investment tokens – are speculative products run by reckless companies that put Americans’ hard-earned money at risk. This is not surprising given the industry that was created to circumvent the rules,” Senator Brown further opined, adding.
The recent crypto meltdown has made clear the need for a comprehensive framework to regulate crypto products to protect consumers and the financial system.
The senator noted that existing rules can be applied to crypto, stating that ” Crypto is not special… We can start with these common sense principles as we consider a regulatory framework for digital assets that puts consumers first and keeps our financial system secure.”
Senator Brown has long been skeptical of cryptocurrencies. Last December, he proposed
