- With FTX collapse, US regulators and lawmakers will keenly focus on regulating stablecoins, NFTs, DAOs, Defi, and much more.
- On the other hand, 100+ crypto policy experts are also lobbying to have a balance between innovation and protection.
As the United States Congress resumes for 2023, cryptocurrencies are likely to be the highlight of the discussions going into this year. Amid what happened in the crypto space last year, lawmakers will be keen on introducing stricter regulatory measures.
The collapse of the crypto exchange FTX has come as a massive shockwave for the entire crypto space. More than one million active users of FTX lost more than $8 billion in cumulative funds as the exchange filed for bankruptcy. As FTX founder Sam Bankman-Fried undergoes a trial, lawmakers and agencies are investigating the reasons behind this crash.
But as per the report from Blockchain Association, over 100 crypto industry advocates have been fighting to maintain the right balance between innovation and consumer protection. On Tuesday, January 3, the 118th U.S. Congress convened in Washington D.C. and shall continue till Jan 3, 2025, during the last two years of President Joe Biden’s first term.
On Tuesday, Ron Hammond, the director of government relations at the Blockchain Association, published a Twitter thread highlighting the challenges and opportunities for Congress. “It is no secret, the crypto industry is in the crosshairs of Congress after the FTX fallout, he adds.
He further adds that things are currently not good for the crypto industry at the Hill. SBF and FTX have provided a major jolt to the crypto space in regulatory circles. The disgraced FTX founder was quite popular for lobbying Congress and regulators.
However, as his empire collapsed in November, his close aids in Congress started distancing themselves from him. “The problem for many in DC is that they equate FTX with the entire crypto industry,” added Hammond.
Crypto Legislation and Regulation Ahead
Hammond believes that the meltdown of crypto exchange FTX could lead to “once-in-a-decade legislation”. Besides, there have been some solid regulatory framework submissions which include the Lummis-Gillibrand bill. This bipartisan bill addresses stablecoin regulations, agency jurisdiction, crypto taxes, banking, and interagency coordination.
Hammond also added that during the initial few months, Congress’ focus will be on FTX, however, stablecoin regulation will continue to remain the priority. Hammond adds:
Smaller bills like stablecoins and spot market regulation have a chance of moving this year, but will likely need to wait till the dust settles on FTX both in the courts and the congressional hearings.
Also, with a split Congress, lawmakers remain largely divided on their crypto views. After the FTX fiasco, anti-crypto Chair of Senate Banking Sherrod Brown recently proposed a complete ban on crypto.
Furthermore, Hammond adds that it is very likely that Congress will touch on other aspects of the crypto space such as NFTs, DAOs, and DeFi. although these topics appeared in the previous bills, interest in them has picked up in recent months due to the recent enforcement actions.
In his concluding note, Hammond wrote that the upside is that crypto has a “strong bench in D.C. and continues to poach talent from other industries on the advocacy, lobbying, and policy front”. There are now 100+ policy experts representing the crypto space.
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