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Sherrod Brown: US senator Sherrod Brown recently recommended that US federal authorities take a ban on cryptocurrencies into consideration.
He specifically mentioned the Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC).
The news
While appearing on NBC’s “Meet the Press,” Brown proposed the ban but admitted that it would be “extremely tricky” to put it into effect.
According to the US senator, the cryptocurrency business may expand globally.
He mentioned several American regulators and said:
“We want them to do what they need to do at the same time – maybe banning it.”
“Although banning it is very difficult because it will go offshore and who knows how that will work.”
To bolster his arguments, Sherrod Brown cited a variety of instances, such as “the threat to national security from Korean cyber criminals to drug trafficking and human trafficking and financing of terrorism and all things that can come out of crypto.”
The demise of FTX provides yet another instructive illustration.
The FTX collapse
The cryptocurrency exchange FTX filed for bankruptcy at the start of November after failing.
Before assessing and selling its assets, the corporation indicated that it will seek Chapter 11 bankruptcy protection.
Alameda Research, a corporation with a related business, also filed for bankruptcy.
A few companies, however, are left from the list, including:
- Ledger X LLC
- FTX Digital Markets Ltd.
- FTX Australia Pty Ltd.
- FTX Express Pay Ltd.
Sam Bankman-Fried, the company’s founder and CEO, announced his departure in a press release.
Taking over, John J. Ray III said:
“The FTX Group has valuable assets that can only be effectively administered in an organized, joint process.”
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What happened
Sam Bankman-Fried was formerly seen as a celebrity in crypto, but he quickly lost that reputation.
As part of its equity exit from the company, Binance started selling its ownership of FTT, the native exchange token for FTX, last year.
Investors began withdrawing funds from the FTX as the token’s value fell, which prompted the platform to halt withdrawals and proclaim a panic.
Brown’s sentiments
Sherrod Brown requested this month that various government agencies work together to find a solution to the problem of prohibiting cryptocurrencies.
“Single regulatory agencies currently generally do not have a comprehensive view of crypto asset entities’ activities,” he declared in a statement.
Brown, an Ohioan Democrat who has served in the US Congress since 2007, is not the first high-ranking official to advocate for additional crypto rules.
Last month, Senator Elizabeth Warren proposed a new plan to regulate cryptocurrency.
The Digital Asset Anti-Money Laundering Act is the name of the proposed legislation.
It makes an effort to demand that providers of digital assets deliver audited financial data.
Additionally, the law proposes to establish capital criteria similar to those employed by banks and other traditional financial institutions.
In addition, the plan would give the SEC more authority over the asset class.
Read also: Maxine Waters firm on having Sam Bankman-Fried attend hearing
Offshore crypto movement
The crypto business is already moving operations outside the US due to the US government’s uncertain regulatory future, despite what the US Senator claimed.
Coinbase CEO Brian Armstrong addressed the issue in a tweet from November.
“FTX.com was an offshore exchange not regulated by the SEC.”
“The problem is that the SEC failed to create regulatory clarity here in the US,” he continued.
“So many American investors (and 95% of trading activity) went offshore.”
Armstrong went on to describe the idea of penalties against US companies as absurd.
Brian Armstrong reiterated his appeal for US lawmakers to take the initiative and drive the movement toward crypto legislation following the collapse of FTX.
His website’s strategies were contrasted with those of the “offshore exchange” with headquarters in the Bahamas, he claimed, adding that Coinbase has been a staunch advocate of crypto regulation.
References:
Banking committee chair: US regulators should ‘maybe’ ban crypto
FTX files Chapter 11 bankruptcy, SBF steps down as CEO
FTX crisis an ‘opportunity’ for US to clarify crypto regulations: Coinbase CEO
