To tackle upcoming crypto crashes, US lawmakers argued that they wanted new regulations on crypto assets. As the country was moving towards the crypto world, the Democrats of the United States believed that regulations on stablecoins and crypto assets would help in the development of the crypto market in the US.
Rostin Behnam, the chairman of the Commodity Futures Trading Commission (CFTC), says certain regulations are needed to prevent huge losses in the crypto market and to maintain users’ safety. He said that clear regulation would be required on crypto assets that are not securities.
According to Behman, the 2022 crypto market was filled with uncertainties. Investors and crypto users faced the worst bear markets at the end of the year due to the sudden collapse of FTX, Terra, and Celsius Network. Earlier in Dec 2022 CFTC chairman said that FTX Group’s LedgerX was an example of how regulating the crypto sector would protect crypto consumers.
The chairman of CFTC stated, “many public reports indicate that segregation and customer security failures at the bankrupt FTX entities resulted in huge amounts of FTX customer funds being misappropriated by Almeda for its proprietary trading. But the customer property at LedgerX, the CFTC regulated entity, has remained exactly where it should be, segregated and secure. This is regulation working.”
In a recent press conference, Behman said, “The crypto market was shaken to its core last year, on several different fronts. In my view the bankruptcies, failures, and runs only validate that action is needed. The ecosystem is vast, will not vanish, and needs comprehensive legislation.” He added, “There is a new Congress, and I will continue to engage and provide technical assistance to draft legislation, as requested.”
In Dec 2022, Sherrod Brown, Chairman of the Senate Banking Committee, stated, “It is crucial that our financial watchdogs look into what led to FTX’s collapse so we can fully understand the misconduct and abuses that took place. I will continue to work with them to hold bad actors in crypto markets accountable.”
US lawmakers drafting new regulations on crypto assets
In the wake of the FTX collapse, United States lawmakers have expedited the process of drafting new regulations on crypto assets. In Dec, John Boozman, the US Senator from Arkansas, said US federal courts and the Securities and Exchange Commission (SEC) see cryptocurrency as a commodity. John advised the Commodity Futures Trading Commission (CFTC) to regulate the crypto market.
Boozman and other US Senators introduced the Digital Commodities Consumer Protection Act (DCCPA) in August to give more power to the crypto regulations. In 2022 the US legislation introduced three bills to recognize the CFTC as a primary regulator of the crypto sector.
Senator Boozman commented on DCCPA that “Our bill will empower the CFTC with exclusive jurisdiction over the digital commodities spot market, which will lead to more safeguards for consumers, market integrity and innovation in the digital commodities space.”
The executive director of the Blockchain Association, Kristin Smith, stated, “we now have three different bills, the Lummis Gillibrand bill, the House bill, the Digital Commodity Exchange Act that all say CFTC is the place to go.”
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