After witnessing the crash of cryptocurrency exchange FTX, members of Congress are calling for quick and comprehensive regulation to protect consumers.
"The events that have transpired this week reinforce the clear need for greater federal oversight of the digital asset industry," said Sen. John Boozman, R-Ark., ranking member of the Senate Agriculture Committee, in a published statement Nov. 10.
Mr. Boozman co-sponsored the Digital Commodities Consumer Protection Act of 2022 along with three of his fellow committee members: Chairwoman Debbie Stabenow, D-Mich., Sen. Cory Booker, D-N.J. and Sen. John Thune, R-S.D. The bipartisan bill, introduced in August, would give the Commodity Futures Trading Commission the authority to regulate the trading of digital assets that act as commodities, such as cryptocurrencies bitcoin and ether.
"Chairwoman Stabenow and I remain committed to advancing a final version of the DCCPA that creates a regulatory framework that allows for international cooperation and gives consumers greater confidence that their investments are safe," Mr. Boozman said in his statement.
In October, Mr. Boozman told Pensions & Investments that he thinks the DCCPA has a "good chance" of passing this year.
Another piece of legislation, the Lummis-Gillibrand Responsible Financial Innovation Act, was introduced in June by Sens. Cynthia Lummis, R-Wyo., and Kirsten Gillibrand, D-N.Y. That bill lays out a framework for SEC and CFTC jurisdiction of crypto assets, as well as stablecoin requirements and how to treat digital assets for tax purposes.
Ms. Lummis said in an emailed statement that the FTX bankruptcy is "both devastating and alarming, but at the same time, not surprising."
"The bottom line is that we need comprehensive regulation in place to weed out the bad actors and ensure consumers have faith in the institutions they are trusting with their hard-earned money," Ms. Lummis added. "Lummis-Gillibrand is the best comprehensive option that we have on the table that balances both consumer protection and innovation."
Sen. Sherrod Brown, D-Ohio, chairman of the Senate Banking Committee and a member of Senate Agriculture Committee, said in an emailed statement that his focus "has always been on the fraud, scams, volatility and outright theft in the crypto industry."
"FTX's bankruptcy and the many other recent instances of instability have proved why we need a comprehensive regulatory approach that protects consumers and our economy from the risks of crypto," Mr. Brown said.
What that approach will be, however, is still unclear.
CFTC Chairman Rostin Behnam previously expressed support for the DCCPA, as he said in a Senate Agriculture Committee hearing that the CFTC is the "right regulator" for the digital commodity market. Meanwhile, SEC Chairman Gary Gensler has repeatedly said that the SEC should be the one to oversee the majority of crypto tokens, including in a hearing before the Senate Banking Committee.
On the other side of the Capitol, the House Financial Services Committee said it plans to hold a bipartisan hearing in December to investigate the collapse of FTX. The committee "expects to hear from the companies and individuals involved, including Sam Bankman-Fried, Alameda Research, Binance, FTX, and related entities," according to a news release Wednesday.
Chairwoman Maxine Waters, D-Calif., said in the news release that she has "led the effort in examining and investigating the digital assets marketplace, and (knows) that we need legislative action to ensure that digital assets entities cannot operate in the shadows outside of robust federal oversight and clear rules of the road."
