While many entities have yet to recover from the FTX collapse, plenty of investors, well wishers and lawmakers who were supportive of the space are feeling somewhat betrayed by the implosion of FTX. “The U.S. Congress needs to make the legislation of crypto a transparent process, so that there is a critical look at the market as a whole,” says Kristin Smith, CEO of the Blockchain Association, a leading not-for-profit crypto organization.
During a recent interview, Smith intimated that the crypto industry wants U.S. lawmakers to speed up crypto legislation as the process has been painstakingly slow, even with the regulators coming in during the interim. Smith discovered that even though the regulators were fast in pushing for the legislation, most decisions are being made outside of public scrutiny. This isn’t right, she noted, and emphasized the need for the crypto industry to be actively involved in order to necessitate an open process involving Congress.
Smith says the regulators spearheading the legislation process with regard to enforcement and settlement actions relate to extremely specific facts. As it is, Congress is in a tight spot, given that those in Washington, DC, who used to be close to FTX CEO Sam Bankman-Fried feel “betrayed” over the sinking of the FTX empire in November 2022.
Smith is hopeful that stablecoin regulation will commence soon in the United States, given that Congress has been working on it since 2019 and it looks as though it is already a done deal. She says the deal came close to happening last year just prior to the collapse of the industry-leading FTX cryptocurrency exchange.
She also said that the risks involved in cryptocurrencies are significantly different from the risks relating to other traditional financial ones, thus regulators need to spend ample time checking out the market and “adjust accordingly” to these risks. Smith has also suggested that the market side and stablecoin regulation be given a high priority instead of only focusing on the legislation regarding criminal activity related to the crypto market. She is of the view that decentralized ledgers are by design capable of revealing any attempts at fraud, so legislating this aspect shouldn’t be a priority at the moment.
This comes on the heels of a Feb tweet posted by the chief policy officer of the blockchain association, which stated that neither the Securities and Exchange Commission nor the Commodities Exchange Commission have any legal ground to enforce any action to regulate the crypto markets.
Clear industry regulations would be welcome to the blockchain industry since actors such as Canaan Inc. (NASDAQ: CAN) could then be certain by what rules they are playing, and that would make them more confident in making their long-term strategic decisions and plans.
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