Legislators in the United States appear to be re-evaluating the crypto industry and the need for regulation due to the collapse of FTX. According to the Wall Street Journal, since the crypto exchange filed for bankruptcy in November, lawmakers have been under pressure to set a new regulatory framework for cryptocurrencies.
Several proposals are in the works that would apply existing banking, securities, and tax rules to cryptocurrencies, and lawmakers are calling on the Securities and Exchange Commission (SEC) to adopt an aggressive approach in the crypto market.
In a December House hearing, Rep. Jake Auchincloss, who is also a member of the bipartisan Congress Blockchain Caucus, reportedly noted that “it is time for blockchain investors and entrepreneurs to build something important or lose more credibility,” adding that in 14 years crypto has only sent “white papers and podcasts”.
Senator Roger Marshall, an advocate of blockchain technology’s potential to stop fraud, also pushed for stricter regulation in the United States. “Somebody needs to convince us that this is not just a Ponzi game,” he said.
Related: Companies and investors may have to return billions in funds paid by FTX
Among the few legislators willing to stand up for the crypto industry, Rep. Patrick McHenry stated that it is necessary “to separate the evil of the individual from the good created by industry and innovation.” The House Financial Services Committee will be chaired by McHenry in the new Congress.
Former FTX CEO Sam Bankman-Fried’s lobby in Washington is focused on a bill that would authorize the Commodity Futures Trading Commission (CFTC) to regulate cryptocurrencies. The bill is expected to be included in the budget spending package for 2023, but will not move forward now due to developments of the past few weeks.
As reported by Cointelegraph, Bankman-Fried is an important donor to Republicans and Democrats in Washington. Earlier this year, he considered spending up to one billion dollars to help influence the 2024 presidential election campaign.
Open Secrets, a platform that tracks money in politics, listed SBF as the sixth largest political contributor for the 2021-2022 cycle, with a total contribution of $39.8 million to candidates and political parties.