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Sherrod Brown: US senator Sherrod Brown recently recommended that US federal agencies take cryptocurrency prohibition into account.
He specifically mentioned the Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC).
The news
In spite of proposing the ban, Brown admitted during an appearance on NBC’s “Meet the Press” that it would be “extremely tough” to implement.
The US senator believes that the bitcoin market may expand abroad.
Additionally, he mentioned some American regulators, saying:
“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 several 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.”
FTX’s demise is yet another instructive example.
The FTX collapse
The crypto exchange FTX failed and filed for bankruptcy at the start of November.
The business announced that it would declare bankruptcy under Chapter 11 before examining and selling its assets.
Alameda Research, a business entity and affiliated corporation, also filed for bankruptcy.
However, a few companies are left out of the file, 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 resignation in the 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.”
Read also: Sam Bankman-Fried made donations to lawmakers before elections
What happened
Sam Bankman-Fried formerly had rockstar status in crypto but quickly lost it.
As part of an equity departure from the company, Binance started selling its holdings of FTT, the native exchange token for FTX, last year.
Investors began withdrawing money 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 that various federal agencies work together to address the issue of banning crypto earlier this month.
“Single regulatory agencies currently generally do not have a comprehensive view of crypto asset entities’ activities,” he declared in a statement.
Brown, a Democrat who has represented Ohio in the US Congress since 2007, is not the only senior figure who has pushed for more crypto rules.
Last month, Senator Elizabeth Warren introduced a new measure to regulate bitcoin.
The Digital Asset Anti-Money Laundering Act is the name of the proposed legislation.
It tries to have producers of crypto assets furnish audited financial records.
The law also seeks to implement capital standards similar to those employed by banks and other traditional financial entities.
Last but not least, the proposal would give the SEC more authority over the asset class.
Read also: Maxine Water grows strict with SBF invitation on Twitter
Offshore crypto movement
The crypto industry is already shifting activities outside of the US due to the US government’s uncertain regulatory future, in contrast to what the US Senator suggested.
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 proceeded by labeling the idea of penalties against US companies as absurd.
Brian Armstrong reiterated his desire for US lawmakers to take the initiative and drive the race toward crypto legislation after FTX’s bankruptcy.
He asserted that Coinbase has been a major advocate for the regulation of cryptocurrencies and contrasted his website’s strategies with those of the “offshore exchange” with headquarters in the Bahamas.
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
