Crypto Slammed in Senate Hearing
Reckless. Speculative. Rule-skirting. Those were just some of the salvos that Senate Banking Committee Chair Sherrod Brown lobbed at the crypto industry as he rolled out a Capitol Hill hearing that featured experts who testified that digital assets need more oversight, just days after a spate of regulatory actions against cryptocurrency firms.
“Fortune doesn’t favor the brave," Brown, a Democrat, said in his opening statement. «It favors the wealthy insiders.” He went on to call digital assets „speculative products run by reckless companies“ that are putting American money at risk and said it wasn't surprising from „an industry that was created to skirt the rules. We need a comprehensive framework to regulate crypto products to protect consumers and our financial system.“
The regulatory rhetoric comes in the wake of the collapse of crypto exchange FTX. Its downfall and a string of failures and bankruptcies at other crypto firm have left many investors' assets stuck and led to a slide in crypto to that's led to what's termed a 'crypto-winter.'
Today's hearing came days after the Securities and Exchange Commission's (SEC) $30 million settlement with Kraken and New York Department of Financial Services' (NYDFS) order that crypto platform Paxos stop minting Binance USD (BUSD), a stablecoin pegged to the value of the U.S. dollar.
One reason rule-making for cryptocurrencies has proved challenging: They don't exist within a clear regulatory bucket. Whether cryptocurrencies are securities, and therefore should be regulated by the SEC, is at the crux of the debate. While most cryptocurrencies are securities, some, like bitcoin, are commodities, according to Lee Reiners, policy director at the Duke Financial Economics Center. „The
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