In response to FTX’s fall, United States lawmakers are reevaluating the crypto industry’s regulatory needs for 2023.
In light of the demise of FTX, legislators in the US appear to be reassessing the crypto business and its regulatory requirements. The Wall Street Journal claims that since the cryptocurrency exchange declared bankruptcy in November, politicians have come under pressure to establish new regulations for cryptocurrencies.
Legislators are urging the Securities and Exchange Commission (SEC) to take a tough stance toward the cryptocurrency industry, and several measures are in the works that would apply current banking, securities, and tax standards to cryptocurrencies.
In a December House hearing, Rep. Jake Auchincloss, who is also a member of the bipartisan Congressional Blockchain Caucus, reportedly noted that “it’s time for the blockchain investors and entrepreneurs to build things that matter or to lose more credibility,” adding that in 14 years crypto has only delivered “white papers and podcasts”
Senator Roger Marshall is a proponent of tougher regulation in the US and believes that blockchain technology has the ability to reduce fraud.
“Someone needs to convince me that it’s not all just a Ponzi game,” he claimed.
Among the few legislators willing to stand up for the crypto industry, Rep. Patrick McHenry stated that it is necessary “to separate out the bad actions of an individual from the good created by an industry and an innovation.”
The House Financial Services Committee will be led by McHenry in the new Congress. Sam Bankman-Fried, a former CEO of FTX, lobbied for legislation in Washington that would empower the Commodity Futures Trading Commission (CFTC) to oversee cryptocurrencies.
The law was anticipated to be part of the budget spending package for 2023, but given the recent developments, it is now unlikely to move forward. According to reports, Bankman-Fried gave a lot of money to both Democrats and Republicans in Washington.
He proposed investing up to $1 billion earlier this year to influence the 2024 presidential election campaigns. With a cumulative donation of $39.8 million for politicians and political parties, SBF is the sixth-largest political contributor according to Open Secrets, a platform that records political spending.
