FTX shows ‘It’s time’ for Congress to find out about…

Senator Cynthia Lummis, known as “Senator Bitcoin” for her advocacy for the cryptocurrency industry on Capitol Hill, said the collapse of crypto exchange FTX highlights the need for Congress to “learn more” about cryptocurrencies.

In a pre-recorded interview with the Financial Times’ Crypto and Digital Asset Summit Senator Lummis, who introduced the bipartisan Responsible Financial Innovation Act with fellow crypto attorney Kirsten Gillibrand, said the fall of crypto exchange FTX shows how critical it is for Congress to “d ‘learn more’ about the crypto industry. The senator described the crypto world as the “Wild West” in terms of inadequate or non-existent regulation. Lummis was asked about recent events associated with former FTX CEO Sam Bankman-Fried’s crypto empire, to which she replied:

I hope it is highlighted to members of Congress who have not taken the time to learn more about this asset class, that it is time for them to learn more so that we may we engage in appropriate regulation.

Lummis pointed to the risks FTX took with customers’ money, “based in large part on the reputation of Sam Bankman-Fried, and his extraordinary ability to earn people’s trust to make big investments and take big bets. on FTX”. Adding that it just shows “how influential some people can be even to sophisticated and wealthy investors.”

Senator Lummis also said that if FTX had complied with the Lummis-Gillibrand bill, it may not have collapsed because the settlement does not allow companies to pool custody and other components of the trading. Lummis told the conference:

The Lummis-Gillibrand bill is a fairly comprehensive effort to integrate digital asset regulation with typical securities and commodities regulations in the United States. The focus is on enabling and accommodating the important innovations happening in this space while protecting consumer assets and using our disclosure and consumer protection capabilities to the benefit of those who are s engage in this very special asset. to classify.

She continued to say:

Consumer assets should be segregated and we would not allow all functions of FTX to be consolidated into a single business entity.

Hopefully the fall of FTX and many others before it urges regulators to take the industry more seriously and take steps to institute proper regulation to prevent something like this from happening again.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended for use as legal, tax, investment, financial or other advice.

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