Cryptocurrency companies reeling from the epic collapse of FTX and its aftermath saw another unwanted turn of events on Sunday’s talk shows.
Senator Sherrod Brown, chairman of the Senate Banking Committee, answered questions on NBC Meet the journalists today on how lawmakers should approach cryptocurrencies in the wake of the FTX debacle.
Host Chuck Todd asked the lawmaker if regulating cryptocurrency would give a “green light” to something many people think should be banned.
Brown, referring to government agencies — the Treasury Department, the Securities and Exchange Commission and the Commodity Trading Commission — replied, “We want them to do what they need to do … maybe a ban.”
His comments follow those of Senator Jon Tester, who sits on the same banking committee, and who Todd asked last weekend whether cryptocurrencies should be regulated or banned.
“One or the other,” he said replied. “It failed the smell test for me… I see no reason why this thing would exist. I really don’t.”
Crypto is an ‘investment in nothing’
But it’s not just lawmakers in Washington, DC—many top business leaders feel the same way.
In September, JPMorgan Chase CEO Jamie Dimon called crypto a “decentralized Ponzi scheme” that is “good for nobody.”
Charlie Munger, vice chairman of Berkshire Hathaway and Warren Buffett’s business partner, said this summer: “Crypto is an investment in nothing…I think anyone selling this stuff is either delusional or evil. I am not interested in undermining the world’s national currencies.”
Munger went so far as to praise Chinese leader Xi Jinping for being “smart enough” to ban Bitcoin in China.
But Brown acknowledged on Sunday that banning cryptocurrency is “very difficult because it’s going to go overseas and who knows how it’s going to work… This is a complicated, unregulated bunch of money.”
FTX founder Sam Bankman-Fried based his business in the Bahamas, where he allegedly led a lavish penthouse lifestyle and, according to federal prosecutors, misappropriated billions of dollars in client funds.
Bahamian authorities arrested him on Monday after the US government officially notified him that it had filed criminal charges against him and was likely to seek his extradition. The USA and the Bahamas have had an extradition procedure since 1994.
Crypto ‘doesn’t have a free pass’
Brown this week thanked American and Bahamian officials behind the arrests, adding in a statement: “I believe Mr. Bankman-Fried will soon be brought to justice. Clearly, he owes the American people an explanation.”
He added: “Things that look and act like securities, commodities or banking products must be regulated and overseen by responsible agencies that serve consumers…Crypto doesn’t get a free pass because it’s bright and shiny.”
Brian Armstrong, CEO of the crypto exchange Coinbase, pointed out in twitter last month that FTX is “an offshore exchange not regulated by the SEC.”
His company is based in the US and as a public company has more transparency than FTX. Coinbase shares hit an all-time low this week.
“The problem is that the SEC has failed to create regulatory clarity here in the US, so many US investors (and 95% of trading activity) have gone overseas,” he wrote. “Punishing American companies for this makes no sense.”
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