- Cynthia Lummis believes that members of Congress should educate themselves on the asset class in order to regulate it.
- The SEC chair, Gary Gensler, is under fire from a US senators.
- The recent FTX implosion and spreading contagion, according to European officials, are a clarion call for regulators.
The United States and European politicians are calling for cryptocurrency regulation. Is the FTX crash a catalyzing event that will finally bring worldwide regulation of cryptocurrency?
Crypto regulation is now front and center in the wake of the recent collapse of the FTX. The latest casualty in the FTX contagion is the BlockFi exchange, which filed for bankruptcy just days ago. Now, governments around the world are exploring how to regulate this new class of assets with a renewed sense of urgency.
Cynthia Lummis, the Wyoming Senator who supports Bitcoin, believes members of Congress need to educate themselves on this asset class in order to regulate it, according to the Financial Times. Last year, the senator called out to displaced bitcoin miners kicked out of China on Twitter, saying, “We want you in Wyoming.”
To make her case for cryptocurrency regulation, Lummis said, “I want to make [the FTX crash] clear to members of Congress that they have not taken time to understand more about this asset class, it is about time they learned more about it so that we can get into the business of regulating it properly.”
Where was Gary?
After FTX’s crash, regulators such as the Securities and Exchange Commission (SEC) were under intense pressure. Lummis said, “We have got to get to the bottom of it – we have got to figure out why Gary Gensler and the SEC are not doing their jobs.”
Perhaps Senator Lummis isn’t aware of the close ties Gensler has with SBF (Sam Bankman-Fried). Gensler taught courses in blockchain and finance at MIT where SBF was a student. In addition, SBF’s on again off again girlfriend Caroline Ellison (and former CEO of Alameda Research) is the daughter of a MIT economics professor Glenn Ellison. He (Ellison) also happens to be close friends with Gary Gensler. Coincidence? Probably. But it does raise conflict of interest issues.
FYI: If interested you can take the MIT course, Blockchain and Money, taught by Gary Gensler for free online.
Europe wakes up
European Central Bank staffer Elizabeth McCaul believes that recent developments in the markets are a wake-up call to regulators around the world to begin the conversation on cryptocurrency regulation in earnest.
The Bank of England’s deputy governor, John Cunliffe, said cryptocurrencies and related services need to come under greater regulation. Last month, the European Union’s Financial Services Commissioner, Mairead McGuinness, called on U.S. lawmakers to establish new, comprehensive cryptocurrency regulations and international standards for the industry.
Final thoughts
In order for valid, legitimate blockchain projects to flourish and speed adoption regulation is mandatory. Otherwise, we’ll be swimming in seas polluted by crashes, rug pulls and outright thievery such as we’ve witnessed with FTX.
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