U.S. Senate Banking Committee Seeks Regulatory Clarity in “Crypto cash” Hearing
Sensitive members of the Senate Banking Committee will be hearing from both crypto enthusiasts as well as evangelists in a Valentine’s Day hearing. They will also be advocating for stricter regulatory safeguards to protect Americans. This is after a string failures that have plagued the cryptocurrency sector over the past year, beginning with the FTX debacle.
Senators Concerned about Crypto Crash
This hearing is taking place at a critical juncture in the cryptocurrency market’s history. The market currently faces numerous scandals, frauds, dramatic arrests and international manhunts. Hacks, exploits, obtrusive advertising, and old embezzlement tactics. Many times, financial authorities like the SEC, NYDFS, and Justice Department have entered crypto firms to penalize or cease operations.
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Tim Scott, Ranking Member, opened the hearing by saying that the committee needed to hear directly from Gary Gensler, the SEC Chair, in order to understand recent regulatory actions taken by the financial watchdog. He was referring to the charges against Paxos and Kraken. Sen. Sherrod brown (D-Ohio), chair of the committee, reiterated the concerns that central banks and governments expressed ten years back. He said that cryptocurrency could be used to illegally traffic drugs and people, and can lead to fraudulent behavior.
Brown’s opening remarks were quoted as reading:
Contrary to crypto evangelists’ claims of democratizing financial services, it’s not just the early adopters who are left holding the bag when crypto is concerned.
Fortune doesn’t favor the brave. It favors wealthy insiders. It’s not about bad actors who didn’t do things the right way. Brown said that crypto catastrophes have revealed what many of us already knew about cryptocurrency, digital assets, and stablecoins.”
Questions Against the SEC
To protect investors and savers, three witnesses were called in to assist government officials to conduct an investigation into the benefits and requirements of setting up a regulatory framework for cryptocurrency businesses.
Not everyone is convinced that adding crypto regulations is the best way of addressing the problems facing cryptocurrency businesses. Senator Tim Scott (Republican from South Carolina) stated that federal authorities already have the power to impose sanctions on a corporation like FTX.
He stated that although the Securities and Exchange Commission had previously noted that cryptocurrency companies are required to comply to existing regulations, he stressed the fact that regulators have the responsibility to “enforce existing regulation and conduct appropriate, effective supervision.”
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