U.S. lawmakers are scrambling to regulate cryptocurrencies under existing financial rules following the collapse of exchange FTX and the arrest of its founder Sam Bankman-Fried on fraud charges.
Lawmakers in Washington, D.C. appear to now agree that cryptocurrency firms should have greater regulatory oversight, but there are different views on how to accomplish that goal.
Critics say the crypto sector is rife with fraud and misconduct, and its time to impose regulations to protect investors.
U.S. prosecutors have charged FTX founder Sam Bankman-Fried with money laundering and fraud, among other charges. The arrest and charges follow the $8 billion U.S. bankruptcy filing of FTX on November 11 this year.
U.S. Senator Elizabeth Warren and Republican Senator Roger Marshall have now introduced legislation aimed at closing money laundering loopholes and other instances of fraud within the cryptocurrency industry.
Senator Warren said she wants to hand control of cryptocurrency oversight to the U.S. Securities and Exchange Commission (SEC).
However, Republican Senator Cynthia Lummis has said that she plans to reintroduce a bill that would give more authority to the Commodity Futures Trading Commission (CFTC) to regulate the crypto industry.
Republican Senator Pat Toomey said Washington lawmakers bears some blame for FTX's collapse given the current lack of regulations.
“The absence of legislation that creates the guardrails for regulation and the corresponding absence of any certainty has driven activity offshore to places like the Bahamas… That doesn't always end well for American consumers,” said Toomey.
