Democrats Revive Push for Crypto Regulation Following FTX Collapse

Democratic agency officials and lawmakers renewed the push for more crypto regulation as FTX, one of the leading exchanges, stared at collapse.

Cryptocurrency critics ramp up pressure for new regulation following the apparent FTX exchange collapse. Meanwhile, FTX faces massive confidence loss due to news of deception, and the exchange seeks acquisition to reassure market participants that they will receive their cash back.

Its woes have welcomed value dips in the cryptocurrency space. Meanwhile, such developments attracted government investigations.

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Senator Elizabeth Warren commented about the current turmoil in the crypto sector (on Wednesday). She tweeted that the fall of one of the leading cryptocurrency exchanges confirms how the marketplace seems to be smoke & mirrors.

Warren believes the industry required aggressive enforcement, enforcing the rules to safeguard consumers & financial stability. Other Democrats want legislation. Maxine Waters, HFSC (House Financial Services Committee) chairwoman, stated that it’s clear there are massive consequences when crypto entities run without Fed oversight and customer protections.

Waters confirmed that she had worked on legislation to monitor the industry. She added that last week’s market development called for urgent legislation in the sector. Waters plans to build a task force on fiscal technology and form a federal framework to safeguard stablecoins.

Stablecoins are virtual currencies with their value tied to fixed assets. Sherod Brown of the Senate Banking Committee said their financial regulators should assess what triggered the FTX fall to understand the abuses and misconduct that happened amidst the exchange collapse.

He confirmed strategies to cooperate with them and hold fraudsters within the crypto space accountable. Brown revealed his commitment to securing a reliable move to safeguard consumers & the United States banking system and markets.

The SEC (Securities and Exchange Commission) and the DoJ (Department of Justice) are working to manage the FTX collapse. Binance planned to acquire the company on Monday only to suspend the deal after Sam Bankman-Fried, FTX founder, withheld the firm’s United States undertakings from this acquisition.

Meanwhile, FTX froze client withdrawals. Gary Gensler, SEC Chair, told CNBC that cryptocurrency investors require better protections in a non-complaint industry.

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