Elizabeth Warren wants to pass a major crypto bill.  Sherrod Brown says not so fast.

Elizabeth Warren wants to pass a major crypto bill. Sherrod Brown says not so fast.

“You’ve got a whole political party here that’s still in the pockets of big financial corporations, whether it’s a crypto company or JPMorgan Chase,” he said, referring to Republicans. “So it is always difficult to do anything legislatively. This is why we so often rely on regulators.

Brown’s cautious approach to crypto legislation in the face of growing demands for the bill underscores how difficult it will be for Congress to agree on a plan, even in the face of a crisis. which highlights the weaknesses of the regulations. FTX, once one of the biggest exchanges in the industry and the most important voices in Washington, filed for bankruptcy on Friday and is now under intense scrutiny over whether it misused client funds. .

“This is now a priority issue,” the senator said. Cynthia Lummis (R-Wyo.), an industry supporter who has a different comprehensive regulatory bill with the senator Kirsten Gillibrand (DN.Y.). “By going months and months without addressing the digital asset industry that has grown so rapidly, we have put ourselves at a regulatory disadvantage to the lack of consumer protection.”

Two key questions lawmakers have yet to resolve are the extent to which agencies have sufficient existing authorities to police the market and, if not, which agency should be empowered to oversee it.

The leaders of the SEC and CFTC are vying for crypto market share, and the split is reflected in legislation that has started to emerge from Capitol Hill.

Sen. Elizabeth Warren (D-Mass.) said Tuesday that a digital currency bill must be “comprehensive,” covering consumer protections, anti-money laundering rules and climate safeguards for crypto mining.

When asked if the SEC has sufficient powers at this time, she said the agency “could do more with current authorities, but to regulate all of this space, we need additional legislation from Congress. “.

Warren said it was an “open question” whether the SEC should be the lead regulator.

“The SEC has certainly shown in the past that it has a strong bent on consumer protection, but it also needs more resources to carry out its current tasks,” Warren told reporters.

Leaders of the Senate Agriculture Committee are backing a bill that would give the CFTC a bigger role in overseeing crypto trading. Today, the CFTC mainly focuses on financial derivatives such as futures contracts.

The bill — presented by the president of the Senate in charge of agriculture Debbie Stabenow (D-Mich.) and Sen. John Boozman (R-Ark.) — is coming under intense scrutiny in the wake of FTX’s collapse, as the company was a major lobbying force behind the legislation. SEC Chairman Gary Gensler said the proposal was “too light.”

Boozman said in an interview that the committee was working with the CFTC and other stakeholders “to ensure that the legislation we proposed would prevent such things from happening and would protect consumers.”

“Right now people are trying to figure out why it imploded,” Boozman said. “You don’t really know what the changes are until you know exactly what’s going on.”

When asked if former FTX CEO Sam Bankman-Fried helped draft the bill, Stabenow said in an interview that “we considered feedback from everyone involved who wanted have a transparent system that provides accountability and regulation – so we certainly took his advice.”

“CFTC Chairman, SEC, Treasury — we worked with everyone, because my concern was exactly that,” she said. “There are no consumer protections in place at this time, and the CFTC does not have the legal authority to intervene unless there is a crisis.”

The collapse of FTX, Stabenow said, “is an example of why we need [the bill] more than ever.”

Sen. Cory Booker (DN.J.), a member of the Agriculture Committee, said “whether industry has contributed or not – it will always happen.”

“This bill is a bipartisan bill” aimed at consumer protection, Booker said.

Brown, a member of the Agriculture Committee, said the bill “required major improvements” and that he had not finished working on the proposal to ensure it was as aggressive as needed.

He said the CFTC had a “narrow jurisdiction” and “we want to see them be aggressive.”

Brown said the contribution of the financial industry to financial regulatory issues — in this case, crypto firms weighing on crypto bills — “is always more important than it should be.”

“I generally believe it, and everything I see tells me so,” he said.

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