US Senator Draws Attention towards ‘Top Priority’ Issue of Crypto Regulation
A hearing regarding ‘Cryptocurrencies’ was to be taken up by the US Congress on the coming Tuesday.
On Tuesday, the hearing commenced in which the opening statement was made by Senator Sherrod Brown.
Senator Brown is also the Chairman of the Banking, Housing, and Urban Affairs Committee of the US Congress.
In his opening statement, Senator Brown drew the attention of Congress members to the issue of crypto regulations. He said that ‘crypto regulation should be the top priority of the Congress for the sake of consumers’ interests’.
Senator Brown’s Concerns over Crypto Collapse
Senator Brown stated that the digital asset industry collapsed after it saw the end of FTX.
He shed light on the crypto market loss which according to him suffered a loss of over $1.46 Trillion in 2022 alone.
He also pointed out that the industry reduced its manpower by sending home over 1600 individuals in the same year. The claim was used to mention that the cryptocurrency industry is losing its traction in the market.
The crypto market has continued to face a downtrend, which is why it is not moving in the upper direction. Therefore, investors and users have continued to leave the platform.
This is the reason why the crypto firms are losing their traction and the companies have no choice but to cut down on costs. As a result, they have to decrease their headcounts, which is the best way to cut down on costs.
Senator Brown argued that 2022 brought to an end the much-expected ‘crypto bubble’ which should have burst long ago.
Because of the bubble bursting, the global digital asset economy collapsed which then instigated a chain of events such as collapsing of several crypto platforms.
Meanwhile, several crypto firms have resorted to suspending withdrawals which actions are against the interests of consumers, suggested Senator Brown.
He however acknowledged that crypto contagion hasn’t introduced any adverse impacts on traditional financial systems. Yet, he looked concerned about the potential damage that the crypto industry is capable of causing.
Senator warned that so far crypto economy is separate but when it would become part of the traditional banking system, it would cause chaos. He further warned that FTX contagion hasn’t ended but is in fact opening up gradually.
Crypto Market Flaws Identified
In his statement, he also talked about and identified the flaws apparent in the face of the crypto industry.
He stated that the regulators are only now grasping the idea however crypto firms were mishandling and mismanaging their internal affairs.
They were in short of liquidities and obtained excessive loans which then led to their inevitable collapse. Consumers’ funds were mishandled, kept unsecured, and exposed to schemes that were meant to fail, claimed Senator Brown.
He further claimed that at the expense of consumers, crypto exchanges and their managements filled their pockets.
Resultantly, trillions of dollars belonging to millions of Americans are withheld by these firms, whose security and return are also doubtful.
The urgency for Comprehensive Crypto Regulations
In the words of Senator Brown, digital assets of any kind are highly volatile goods offered by irresponsible entities. He stated that because of irresponsible entities in the digital asset sector, consumers’ money is in grave danger.
He further criticized the crypto industry by suggesting that it was created specifically for avoiding ‘mandatory regulations’ in the first place.
At the end of his statement, he emphasized on the urgency of crypto regulations.
He stated that existing circumstances warrant a proper and effective crypto regulatory framework for the sake of consumers as well as the financial system.
As an interim arrangement, Senator Brown advised that the existing rules applicable to conventional markets be applied to crypto. Meanwhile, the regulators must bring forth their recommendations to the lawmakers.
He insisted that the regulators, lawmakers, and stakeholders must sit together with the common goal of introducing comprehensive regulations for consumers’ sake.
