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Chorus of Lawmakers Collectively Calls for Crypto Controls in FTX Fallout Cryptocurrency

The collapse of cryptocurrency exchange FTX more than rattled the markets this week. This has caught the attention of several US lawmakers who have used the resulting pandemonium as evidence that tighter regulation of the crypto industry is needed.

Many officials have expressed concerns about the state of the industry and how investors are being harmed, especially those who have been impacted by FTX’s rapid shutdown. Many have argued that a regulatory framework for crypto is urgently needed.

At the start of the uproar, when it seemed possible that FTX could be acquired by Binance, Congressman Patrick McHenry (R-NC) – the top Republican on the House Financial Services Committee – released a statement on Tuesday stressing the need of a regulation.

“Recent events show the need for congressional action,” he wrote in a Press release. “It is imperative that Congress establish a framework that ensures Americans have adequate protections.”

Maxine Waters (D-CA), chair of the House Financial Services Committee, shared similar concerns about the industry on Thursday, suggesting that federal regulations could have prevented investors from being harmed to the extent that they have been.

“Now more than ever, it’s clear that there are major consequences when cryptocurrency entities operate without strong federal oversight and customer protections,” she said. declared.

U.S. Senator Sherrod Brown (D-OH), chairman of the Senate Banking, Housing, and Urban Affairs Committee, said it’s crucial for financial watchdogs to study FTX’s collapse to understand how investor funds have been abused.

“FTX’s recent collapse is a strong warning that cryptocurrencies may fail,” he said. declared. “The continued turmoil in the cryptocurrency market is why we need to think carefully about how to regulate cryptocurrencies and their role in our economy.”

Congressman Brad Sherman, chairman of the subcommittee on investor protection and capital markets, said a lack of regulatory clarity — created in part by the Securities and Exchange Commission — was a major reason why the situation surrounding FTX was so calamitous.

“It is important now more than ever that the SEC take decisive action to end the regulatory gray zone in which the crypto industry has operated,” he wrote in a statement. statement. “To date, the efforts of billionaire crypto bros to deter meaningful legislation by flooding Washington with millions of dollars in campaign contributions and lobbying expenditures have been effective.”

Finally, Sen. Patrick Toomey (R-PA), who also criticized the SEC’s regulatory approach for relying heavily on enforcement, also called for the need for a clear regulatory framework.

“This episode underscores the need for a sensible regulatory regime that, among other things, ensures that a centralized exchange segregates and protects client assets,” he said in a Tweet.

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