During a Senate Banking Committee meeting, US Democratic Senator and Chairman of the Committee, Sherrod Brown, emphasized the need for a comprehensive regulatory framework for cryptocurrencies to safeguard investors from losing their funds.
Brown cited a series of bankruptcies within the cryptocurrency industry as evidence of the urgency of imposing stringent regulations that will protect consumers and the overall financial system.
According to Brown, the digital asset market suffered a loss of $1.46 trillion in capitalization in 2022, resulting in the loss of over 1,600 jobs in the crypto industry.
Brown also referred to the bearish trend in the market, which contributed to the bankruptcy of several cryptocurrency platforms, leading to significant losses for the entire cryptocurrency ecosystem.
The situation has affected major exchanges such as FTX, which is currently undergoing bankruptcy proceedings, leaving its clients unable to recover their funds.
Brown is adamant that “cryptoinfection did not infect the financial system,” but acknowledges the dangers posed by the cryptocurrency industry, which has already collapsed.
The senator’s proposed solution is to impose the same regulations that apply to traditional finance on cryptocurrencies. Brown believes that cryptocurrencies are not unique and that their regulation should prioritize the interests of consumers and the security of the financial system.
According to Brown, the recent cryptocurrency failures have demonstrated that stablecoins, tokens, and all crypto assets are speculative products run by reckless companies that put people’s hard-earned money at risk.
Brown’s recent proposal for a complete ban on cryptocurrencies was motivated by his view that they are a national security threat. In 2021, he also called for the revocation of banking licenses from crypto companies by the Office of the Comptroller of the Currency (OCC).