Following the collapse of systemically important crypto exchange FTX, US politicians feel compelled to take a second look at the crypto industry and rethink their previous approach. According to the Wall Street Journal, since the platform filed for bankruptcy in November, politicians around the country have been under pressure to develop an appropriate legal framework.
Various proposals are already underway that want to apply banking law, securities law and tax law to cryptocurrencies. In addition, the US Securities and Exchange Commission (SEC) – which has so far been seen as the most important authority for dealing with the industry – is increasingly being called upon to take tough action against it.
During a parliamentary hearing on the subject in December, US Congressman Jake Auchincloss is said to have already demanded that “it is time for blockchain investors and entrepreneurs to develop things that add value”, otherwise they would only do more would lose credibility. In 14 years, the crypto industry has reportedly produced nothing but “white papers and podcasts.”
Senator Roger Marshall, who is genuinely committed to the potential of blockchain technology, also expects tougher regulation. He says of the crypto market, “Someone has to convince me that this isn’t just one big pyramid scheme.”
But there are still a few politicians like MP Patrick McHenry who are committed to crypto despite all the upheaval. The latter emphasizes that it is necessary to “separate the misdeeds of a single person from an entire industry and from an innovation”. Given that McHenry will soon chair the House Finance Committee, his vote carries weight.
However, it should be noted that former FTX CEO Sam Bankman-Fried (SBF) lobbied in Washington. He was particularly interested in a bill that would put the regulation of cryptocurrencies in the hands of the US trade regulator CFTC. However, given the recent developments surrounding the once influential crypto entrepreneur, this project is likely to be shelved for the time being.
As Cointelegraph reports, Bankman-Fried influenced American politics not only with his voice but also with his wallet. SBF therefore made significant donations to both parties. For the 2024 election campaign, the FTX boss had even pledged up to US$1 billion in donations.
The Open Secrets donations database lists Bankman-Fried as the sixth largest 2021-2022 election campaign donor with political fund injections totaling US$39.8 million for individual politicians and their parties.