The head of the Senate Banking Committee urged Treasury Secretary Janet Yellen to work with lawmakers to craft crypto legislation that tackles risks exposed by FTX’s spectacular collapse.
(Bloomberg) — The head of the Senate Banking Committee urged Treasury Secretary Janet Yellen to work with lawmakers to craft crypto legislation that tackles risks exposed by FTX’s spectacular collapse.
“As we continue to learn more details, the failure of this crypto exchange brings to mind the litany of financial firm failures due to the combination of reckless risk taking and misconduct,” Sherrod Brown, an Ohio Democrat, said in a Wednesday letter. “Congress and the financial regulators must work to get all of this right.”
Brown asked Yellen to work with lawmakers on ways to ensure that crypto risks “do not spillover into traditional financial markets and institutions.” The FTX turmoil highlights many of the issues that regulators raised in a recent report on the asset class, he said.
Top US financial officials, including Yellen and the head of the Federal Reserve, said last month that the government has limited ability to regulate crypto assets that aren’t covered by securities laws. The dynamic means that investors in those markets lack robust investor-protection rules to prevent conflicts of interest and market manipulation. Congress should give regulators new powers, their report said.
On Wednesday, Brown also urged federal agencies to enforce the rules and laws that are already on the books. “Regulators can take on the significant noncompliance with current law among crypto asset firms and minimize, if not eliminate, the opportunities for regulatory arbitrage,” he said.
More stories like this are available on bloomberg.com
©2022 Bloomberg L.P.
