Why Senate Banking Chief Suggests SEC And CFTC Should Ban Crypto?

Crypto is at the crosshair of a U.S. lawmaker – and it’s not surprising.

Sen. Sherrod Brown, Chairman of United States Banking, Housing, and Urban Affairs Committee, suggested on December 18 that federal agencies including the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) should perhaps consider the idea of banning crypto especially following the sudden collapse of crypto exchange FTX last November.

“Maybe banning it, although banning it is very difficult because it will go offshore and who knows how that will work,” The Hill quoted Brown as saying in a report.

Concerns regarding the viability of the digital currency sector were rekindled after FTX’s demise, which scared regulatory agencies and frightened investors.

Brown’s striking pronouncements were made on NBC’s “Meet the Press” but the senator was also quick to add getting rid of crypto is easier said than done.

Senate Banking, Housing, and Urban Affairs Committee Chairman Sherrod Brown. Image: Greg Naah/The Hill.

A Threat To National Security?

Brown also shared his sentiment with that of colleague Sen. Jon Tester who also believes in the banning of digital currencies.

More so, Brown disclosed that in the course of over 18 months he has been relentlessly trying to “educate and convince” his fellow lawmakers on the “dangers” of crypto and that something should be done at the legislative level.

In fact, Brown pointed out that the implosion of FTX is a huge lesson and factor but is only one slice of the massive crypto pie. Further, he demonstrated how bitcoin and its peers can threaten national security such as what is happening in North Korea, the hermit state that is notorious for cybercrimes, and other nefarious activities like terrorism, and human and drug trafficking, to name a few.

I applaud the @TheJusticeDept and the Bahamian authorities for holding Sam Bankman-Fried accountable.
The @SenateBanking and Housing Committee will continue working to uncover crypto’s risks to consumers, our financial system, and our national security. https://t.co/dsSJ09PzYx
— Sherrod Brown (@SenSherrodBrown) December 13, 2022

FTX Downfall Triggers Increased Regulation On Crypto

On November 30, the Ohio representative released a statement that calls for the regulation of the industry and has even expressed strong support for the criminal charges filed by the U.S. Department of Justice against Sam Bankman-Fried, former CEO of FTX.

The former FTX bigwig was charged with theft for taking customers’ money to fund Alameda Research and also his luxurious lifestyle.

On the other hand, Sen. Tom Emmer has opposed Brown’s statement that the fall of FTX signaled a failure in the bitcoin market.

Crypto total market cap sees a decline, now settles at $764 billion | Chart: TradingView.com

On Sunday, Brown characterized the digital currency market as a “complicated, unregulated pot of money” and said the problem goes far beyond FTX.

Additionally, Emmer believes that regulations on bitcoin could even negatively impact the U.S. in terms of financial innovation and advancement.

On 11 November, FTX filed for bankruptcy, and Bankman-Fried resigned as CEO. On December 12th, Bahamian authorities apprehended SBF, and they plan to extradite him to the United States.

Meanwhile, Patrick McHenry, the incoming chairman of the House Committee on Financial Service, also happens to support crypto.

In fact, just this week, he paused changes on crypto taxes to allow more time for the clarification of the original tax provision.