Key Takeaways

  • Members of the Senate met to discuss “risks, regulation, and innovation” of digital assets today.
  • FTX CEO Sam Bankman-Fried appeared to say that the CFTC needs to provide more regularity clarity to ensure the United States holds a competitive position when it comes to crypto.
  • The discussion comes a day after members of Congress collectively said that stablecoin issuers should not have to become insured depository institutions.

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FTX CEO Sam Bankman-Fried advocated for the benefits of cryptocurrency markets in a Senate committee hearing on digital assets today. 

FTX CEO Testifies Before Senate 

Sam Bankman-Fried wants the Commodity Futures Trading Commission to help regulate the cryptocurrency market in the U.S. 

The FTX CEO testified before the Senate Ag Committee as part of a discussion on “risks, regulation, and innovation” of the digital assets space today, where he urged the CFTC to provide more regulatory clarity over cryptocurrencies. 

He argued that the crypto market is more favorable than traditional markets for regular participants as it gives equitable access rather than gatekeeping in favor of larger institutional players. He also remarked that while the majority of the intellectual property related to cryptocurrencies originates in the United States, 95% of the volume occurs offshore. He said that the U.S. should make efforts to “move that liquidity back onshore” and that providing “federal oversight and clarity” would be a huge benefit. He then pointed to the CFTC as a strong candidate to provide the necessary regulatory clarity. 

Members of the Senate in attendance quizzed Bankman-Fried and the other speakers on how they think the U.S. should move to regulate the space, as well as the potential risks of the crypto market. Senator Stebanow, who chaired the hearing, asked Bankman-Fried how the CFTC would handle being pulled away from “traditional areas of responsibility” to regulate crypto. Bankman-Fried responded by suggesting that FTX and other key players in the industry could provide contributions to cover the cost of using additional resources. He then affirmed once again that he “would love to see the CFTC play a more active role” in overseeing regulation of the industry. 

Longtime Bitcoin advocate Perianne Boring also appeared at the hearing to advocate for cryptocurrencies, describing a “cyber space race” of nations looking to stay ahead in the digital economy. On the same topic, Senator Thune noted that it appears that the U.S. is “not particularly competitive” in crypto, before asking how the U.S. could move forward to regulate the space “in a way that reflects the risks” without stifling innovation. Reiterating his comments on how the CFTC should act, Bankman-Fried said that the question of whether countries are in a competitive position to embrace crypto rests “on whether regulation is clear or unclear.” Those countries who are ahead in crypto, he said, are the ones that have established clear regulatory frameworks. 

While the hearing largely focused on how the U.S. could move toward regulation and embracing crypto technology, senators also asked expressed concerns related to the environmental impact of cryptocurrency mining, and how consumers could stay protected—topics that have long been at the heart of conversations among U.S. regulators discussing crypto over recent months.

The hearing came just a day after another relatively positive development for crypto regulation in the U.S. as members of the Senate gathered to weigh the benefits and risks of stablecoins. Discussing a November report published by the President’s Working Group on Financial Markets, multiple senators argued that stablecoin issuers should not have to become regulated banks to be able to mint dollar-pegged assets. 

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