US Senate Committee Chairman on Banking, Housing, and Urban Affairs Sherrod Brown has called for a comprehensive regulatory framework for cryptocurrencies. “The recent cryptocurrency crises have made it clear that we need a comprehensive crypto regulatory framework to protect consumers and our financial system,” the senator said.
US lawmaker wants a comprehensive regulatory framework for crypto
U.S. Senator Sherrod Brown (D-OH), chairman of the Senate Committee on Banking, Housing, and Urban Affairs, spoke about the regulation of cryptocurrencies on Tuesday in his opening statement at a congressional hearing titled “Crypto Crash: Why Financial Guarantees Are Necessary for Digital Assets.” “.
“The crypto industry has collapsed,” the senator began, noting that the crypto market lost $1.46 trillion in 2022 and crypto firms cut more than 1,600 jobs. The MP elaborated:
When the value of the cryptocurrency collapsed last year, the platforms began to collapse, resulting in big losses in the rest of the crypto ecosystem. The remaining crypto firms had to put customer withdrawals on hold, depriving people of their own money.
Noting that the crypto-infection had not infected the wider financial system, the Ohio senator said, “We saw glimpses of the damage it could cause if crypto migrated to the banking system.” He warned: “This nightmare is not over yet… We are still learning the full extent of the consequences of the FTX collapse.”
Noting that “since these crypto firms have filed for bankruptcy, regulators and politicians have also become aware of how mismanaged some of these businesses have been,” the senator stressed:
They were over-leveraged and under-capitalized. They had no internal risk controls. Careless about customer money. In the FTX case, they used it to line their own pockets. Now the money of millions of Americans is trapped and they may never get it back.
“These crypto-disasters exposed what many of us already knew: digital assets — cryptocurrencies, stablecoins, and investment tokens — are speculative products run by reckless companies that put Americans’ hard-earned money at risk. No wonder for an industry that was built to bend the rules,” said Senator Brown, adding:
The recent cryptocurrency crashes have made it clear that we need a comprehensive framework for regulating crypto products in order to protect consumers and our financial system.
The lawmaker noted that existing regulations could apply to cryptocurrencies, stating: “Cryptocurrency is nothing special… We can start with these common sense principles as we review a regulatory framework for digital assets that puts consumers first and ensures the security of our financial system.”
Senator Brown has long been skeptical about cryptocurrencies. Last December, he proposed a ban on cryptography. However, he admitted that it is very difficult to ban cryptocurrency, because it will go offshore.
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