Congress Really Wants to Regulate Crypto After FTX

by
Nick Marinoff
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With FTX filing bankruptcy and Sam Bankman-Fried now leaving the throes of his once-great company, Congress and the elites in Washington are once again turning up the volume on their arguments for regulating the crypto space.

Congress Is Coming After FTX

There have been far too many accidents this year in the world of crypto. With companies like Celsius suddenly halting withdrawals and then filing for bankruptcy and assets like the Terra Luna (allegedly) stable coin crashing to the ground, many members of Congress are hoping to instill proper regulations to ensure people remain protected and that their investments are not tampered with.

This latest news surrounding FTX is making more members of Congress join the “we need crypto regulation” fight. The irony of the situation is that Bankman-Fried was a regular in our nation’s capital as an advocate for the space. Who would have thought his fall from grace would be so distinct that now the same people he pleaded and spoke with are calling for his testimony and indictment?

In a tweet following the collapse of his company, Bankman-Fried commented:

I f*cked up and should have done better.

The apology was not enough to sway regulators to feel sorry for him or go easy on him. Members of the House like Maxine Waters, a democrat in California and chair of the House Financial Services Committee, commented with:

Now more than ever, it is clear that there are major consequences when cryptocurrency entities operate without robust federal oversight and protections for customers.

Republican Patrick McHenry, who is the current GOP committee ranking member, also threw his two cents into the mix, stating:

The recent events show the necessity of congressional action. It’s imperative that Congress establish a framework that ensures Americans have adequate protections while also allowing innovation to thrive here in the U.S.

In late 2021, Bankman-Fried told members of Congress at a hearing:

There are irresponsible actors in the digital asset industry and those actors attract the headlines, but FTX is not one of them and in fact has built a resilient, risk-reducing platform as a competitive advantage.

Jim Himes, a democrat from Connecticut and a fellow member of the House Financial Services Committee, commented that it’s likely Bankman-Fried will lose his access to Washington following the collapse of FTX. He said:

Now you see the Washington darling who knew people, mainly democrats, and that persona just evaporate… He was your classic founder, nerdy genius and you assumed he had twice the IQ you did.

Watchdogs Should Be in Place

Lastly, Sherrod Brown – a democrat from Ohio and the chair of the Senate Banking Committee – said:

It is crucial that our financial watchdogs look into what led to FTX’s collapse so we can fully understand the misconduct and abuses that took place.