Democratic and Republican leaders on the Senate Banking Committee called on Congress on Thursday to step up oversight and regulation of cryptocurrencies amid the continued bankruptcy of major cryptocurrency exchanges.
Senator Sherrod Brown (D-Ohio) and Senator Pat Toomey (Pennsylvania), both chairmen of the Banking Commission, said FTX, one of the world’s most prominent cryptocurrency trading platforms, The crisis we face is federal regulation and oversight.
“The continued turmoil in the cryptocurrency market requires careful consideration of how to regulate cryptocurrencies and their role in the economy,” Brown said in a statement.
“It is important that our financial watchdogs look into what led to the collapse of FTX so that we can fully understand the fraud and abuse that took place.”
In a series of tweets, Toomey said the FTX demise “highlights the need for a sensible regulatory regime.”
“(a) the refusal of regulators to give clear guidance to well-intentioned parties and (b) the refusal of lawmakers to take action, the cryptocurrency sector has operated in a state of great ambiguity. ‘ Toomey tweeted.
“We should start by finding common ground with stablecoin regulation,” he said, referring to issued digital tokens meant to hold a fixed value.
FTX and its founder Sam Bankman-Fried are facing bankruptcy and a federal investigation after its questionable financial revelations sparked a massive run on its books. Attempting to withdraw $6 billion, the company is on the brink of bankruptcy.
Bankman-Fried tried to bail out FTX by selling it to its biggest rival, Binance. However, Binance pulled the deal on Wednesday, saying that FTX’s financial situation was too precarious and hopeless.
Several news outlets also reported that Bankman-Fried secretly funded bets made by his investment firm, Alameda Partners, with money deposited by FTX account holders.