U.S. Sen. Tim Scott (R-S.C.), a ranking member on the Senate Committee on Banking, Housing and Urban Affairs, said that working to develop a framework for the regulation of digital assets is one of his top priorities for this Congressional session.
"Recent years have seen expansive growth in the digital assets industry, including an increasing number of consumers interacting with cryptocurrencies. Several high-profile failures resulted in lost consumer assets, exposed regulatory gaps, and highlighted concerns with illicit finance," said U.S. Senator Tim Scott, a ranking Member on the committee, according to a press release. "Moving forward, the Committee should work to facilitate a bipartisan regulatory framework."
On Feb. 3, U.S. Sen. Sherrod Brown (D-Ohio), Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, announced that the committee will hold a full hearing at 10 a.m. EST Feb. 14, "Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets" hearing on digital assets is scheduled for 10 am on Feb. 14.
Brown previously wrote a letter to U.S. Treasury Secretary and Chair of the Financial Stability Oversight Committee (FSOC) Janet Yellen on Nov. 30 about the need for regulatory framework for cryptocurrency and digital assets, citing risks to consumers that came to light with the bankruptcy filing of crypto exchange FTX earlier that month.
“In the wake of FTX’s implosion, I ask that you coordinate with the other financial regulators to further work on the recommendations from the FSOC Report, including the development of legislation that would create authorities for regulators to have visibility into, and otherwise supervise, the activities of the affiliates and subsidiaries of crypto asset entities," Brown wrote in the letter. "As noted in the FSOC Report, single regulatory agencies currently generally do not have a comprehensive view of crypto asset entities’ activities. I look forward to working on such legislation with you and the FSOC agencies.”
In December, the Committee held a hearing titled “Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers," at which Brown thanked those involved in apprehending Sam Bankman-Fried, the former FTX CEO, and called for further investigation into the crypto exchange's collapse.
"This isn’t just about crypto. This is about protecting the consumers and the regulated financial sector from bad actors who think rules don’t apply to them," Brown said.
Some crypto companies, including Binance, the world's largest crypto exchange, have expressed interest in helping to facilitate the regulatory process. After HM Treasury released a consultation paper as part of the UK government's next steps in enacting digital asset regulation, Binance said in a Feb 1. tweet that it "has vocally supported the need for effective and appropriate regulation to help with mainstream adoption of digital assets." Binance said it "welcomes the next steps" the UK government had taken and was eager to review the paper and provide feedback. "It’s our strong belief that a stable regulatory environment helps to support innovation and is essential to establishing trust in the industry, as well as long-term growth," Binance said.
