The recent news around cryptocurrency exchange FTX.com has highlighted the need for legislation to protect consumers, Congresswoman Maxine Waters, chairwoman of the House Financial Services Committee, said Thursday (Nov. 10).
The collapse of FTX.com, which has left its customers unable to access their funds, is one of several such incidents involving crypto companies and affecting both consumers and investors, Waters said in a statement posted on the committee’s website.
“Now more than ever, it is clear that there are major consequences when cryptocurrency entities operate without robust federal oversight and protections for consumers,” Waters said in the statement.
Over the past four years, under Waters’ leadership, the financial services committee has examined and investigated the cryptocurrency marketplace, formed task forces on financial technology and artificial intelligence (AI), and created a working group on digital assets, Waters said.
“In addition, for several months, I’ve been working around the clock with Ranking Member Patrick McHenry to craft bipartisan legislation that establishes a federal framework for stablecoins in order to begin building the safeguards needed to protect customers’ assets and insulate our financial markets from contagion,” Waters said in the statement. “This week’s news further highlights the urgent need for legislation.”
Waters’ statement comes after reports that the collapse of FTX was set in motion by the platform loaning billions of dollars to sister company Alameda Research in a bid to prop it up, that federal regulators are investigating FTX for possible mishandling of customer funds and its relationship with Alameda, and that rival crypto trading platform Binance walked away from a deal to acquire FTX after conducting just two days of due diligence.
Securities and Exchange Commission (SEC) Chair Gary Gensler Thursday morning that the crypto field is noncompliant and that there are two ways crypto companies and the SEC might hash it all out.
One path is for the SEC to work with exchanges and lending platforms to get them properly registered, Gensler said, adding, “We have another path, and that is enforcement.”
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