US Lawmakers Push Bipartisan Bill to Regulate Cryptocurrencies
The collapse of FTX has been described by Republican Senator Cynthia Lummis as a call attention to the Congress, which asks for more regulation. This is a new attempt by the Government to control a market that, until now, they have not been able to handle. Undoubtedly, their intentions are far from protecting users (as they themselves affirm) and have more to do with controlling citizens’ finances and, ultimately, keeping a piece of the cake.
More regulations are needed
It was recently reported that Senator Cynthia Lummis was speaking at the Financial Times Cryptocurrency and Digital Assets Summit about the bankruptcy of FTXwhich led to the loss of customer deposits worth 8,000 million dollars, and that this bankruptcy, according to her, highlights the need for greater regulation of the nascent cryptocurrency industry.
Lummis, a Republican congresswoman from Wyoming, has proposed a bill as a solution to this problem which he introduced in a joint effort with Kirsten Gillibranda Democratic congressman from New York, in June of this year.
«I hope that [el colapso de FTX] highlighted with members of Congress who have not taken the time to learn more about this asset class, that it is time they learned more about it so we can engage in proper regulation«.
There is no doubt that the senator became known in Congress as one of the first defenders of cryptocurrencies, since he bought his first bitcoin almost ten years ago. He still owns her, but holds her in a blind trust.
Her argument was that clients like her, who use cryptocurrencies to store their digital assets and do not actively trade in them, They don’t need any more government oversight than they do now.
His main concern is that stricter rules are put in place around companies like FTX that trade and have custody of client assetsas well as engage in practices such as remortgaging, which allows the exact same asset to be repurchased multiple times, while engaging in circular lending practices.
According to Lummis, his cryptocurrency bill will prohibit mixing client assets with investments belonging to the exchange, which is one of the main reasons for FTX’s losses, a practice that has been blamed for the exchange’s losses.
There is also the option to determine which cryptocurrency tokens are or are not tradable securities, using a legal doctrine known as the Howey test, which is based on a Supreme Court precedent. It is possible that this clarification will have a positive impact on the entry of more conventional banks in this market.
He stated that he had high hopes that his bill would occupy “highly on our legislative agenda» when Congress reconvenes in January. He remains on the Senate finance committee, hoping the bill will pass soon.
According to Lummis, he is currently working with the Securities and Exchange Commission regulators to ensure that the loopholes he is trying to close are not being exploited by non-cryptocurrency companies to evade regulation.
It is not the first time that a US senator has tried to strictly regulate cryptocurrencies and it will not be the last. But the industry is evolving and moving very fast and it seems that no such action can stop it.
The intention of the proposed regulations is to bring more control to citizens and therefore less financial freedom for them. It has been discussed how this goes against the original spirit of cryptocurrencies, whose users seek to use their money without the interference of any government or bank. Therefore, the industry may not follow the rules and decentralization may find its way.