White House Reps Pen Letter Calling for Stricter Crypto Laws
White House officials Brian Deese, Arati Prabhakar, Cecilia Rouse, and Jake Sullivan have penned a letter calling on Congress to instill stricter crypto trading laws to ensure that something like the FTX debacle never occurs again.
A Letter to Those in Charge
The letter states:
Congress could also make our jobs harder and worsen risks to investors and to the financial system. Legislation should not greenlight mainstream institutions, like pension funds, to dive headlong into cryptocurrency markets. In the past year, traditional financial institutions’ limited exposure to cryptocurrencies has prevented turmoil in cryptocurrencies from infecting the broader financial system. It would be a grave mistake to enact legislation that reverses course and deepens the ties between cryptocurrencies and the broader financial system.
The letter goes on to say:
Some cryptocurrency entities ignore applicable financial regulations and basic risk controls. Cryptocurrency platforms and promoters often mislead consumers, have conflicts of interest, fail to make adequate disclosures, or commit outright fraud, and there is poor cybersecurity across the industry that enabled the Democratic People’s Republic of Korea to steal over a billion dollars to fund its aggressive missile program.
The call for crypto legislation has only gotten stronger following the collapse of FTX, once considered the golden child of the crypto space. There have been many digital currency exchanges that have popped up in the space over the last few years, but none reached the pinnacle that FTX reached, and those that did needed much more time than the respective trading platform required.
First arriving in 2019, FTX rose up the ranks to become one of the world’s top five digital currency trading companies by 2022. Its founder and chief executive – Sam Bankman-Fried – was lauded as a genius, and his net worth was in the billions before the firm went under.
Republican Representative and Majority Whip Tom Emmer said, after Sam Bankman-Fried was arrested, that all centralized crypto platforms need to be watched with a careful eye. He commented:
It’s not about crypto; it’s about centralized finance. Defi (decentralized finance) is the point. They’re going after decentralized finance. This is not what it’s about. It’s not about the crypto industry.
Ensuring Blockchain Is Used for Good
Darren Soto – a democrat representative in Florida – managed to sponsor two successful bills in the House in 2021. The bills called for the studying of blockchain to see how it could strengthen security and reduce fraud. On the House floor two years ago, he said:
It’s essential that the United States continue to be a global leader in these emerging technologies to ensure our democratic values remain at the forefront of this technological development. As a responsible global leader, the United States must strike the appropriate balance of providing an environment that fosters innovation while ensuring appropriate consumer protection.
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