US Senate Committee on Banking, Housing and Urban Affairs Chairman Sherrod Brown has called for a comprehensive regulatory framework for cryptocurrencies. “The recent cryptocurrency crashes have made it clear that we need a comprehensive framework to regulate cryptocurrency products to protect consumers and our financial system,” the senator said.
US Lawmaker Wants a Comprehensive Regulatory Framework for Crypto
US Senator Sherrod Brown (D-OH), chairman of the Senate Banking, Housing, and Urban Affairs Committee, spoke about crypto regulation Tuesday in his opening statement at the congressional hearing titled “Crypto Crash: Why Financial Safeguards are Need for Digital Assets”. .”
“The cryptocurrency industry has collapsed,” the senator began, noting that the cryptocurrency market lost $1.46 trillion in value in 2022 and that cryptocurrency companies have cut more than 1,600 jobs. The legislator detailed:
When cryptocurrency values crashed last year, platforms began crashing, leading to further losses in the rest of the cryptocurrency ecosystem. The remaining crypto companies have had to stop customer withdrawals, freezing people out of their own money.
While noting that the cryptocurrency contagion did not infect the broader financial system, the Ohio senator said, “We saw glimpses of the damage that could have been done if crypto migrated into 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 “as these crypto companies filed for bankruptcy, regulators and lawmakers also learned just how out of control some of those companies were,” the senator emphasized:
They were over-leveraged and undercapitalized. They had no internal risk controls. They were careless with customers’ money. In the case of FTX, 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 catastrophes have 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. . Not surprising in an industry that was built to circumvent the rules,” Senator Brown further opined, adding:
The recent crypto crashes have made it clear that we need a comprehensive framework to regulate crypto products to protect consumers and our financial system.
The lawmaker noted that existing rules can be applied to cryptocurrencies, stating: “Cryptocurrencies are 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 Finance system”.
Senator Brown has long been skeptical of cryptocurrencies. In December of last year, he suggested that cryptocurrencies “maybe” should be banned. However, he acknowledged that it is very difficult to ban cryptocurrencies because it will go abroad.
What do you think about US Senator Sherrod Brown’s call for a comprehensive regulatory framework for cryptocurrencies? Let us know in the comments section.
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