Blockchain Association Chief Policy Officer Jake Chervinsky posted a lengthy thread on Twitter explaining that what happened with FTX was not a failure of the crypto industry.
For Chervinsky, what happened with the FTX cryptocurrency exchange was not a failure in the underlying technology of Bitcoin and cryptoassets, Blockchain, but rather a crime, which he called a “historic fraud,” which was perpetrated by a scammer in the Bahamas, he said.
Chervinsky, who is also a strategic advisor to Variant Fund, noted that Open source public blockchains have an unprecedented ability to root out bad actors, by increasing transparency, mitigating risk and eliminating untrusted third parties.
In response to the difficult times cryptocurrencies are going through, Chervinsky also noted that the industry is ready to mature and build a financial system free of bad actors.
Chervinsky's tweet came as a response to comments from crypto investor Ryan S. Adams, about the consequences of The FTX exchange debacle may have on the American blockchain and DeFi ecosystem.
Adams commented that the “wrath of regulators is coming” following the recent crisis caused by the exchange.
What's happening with cryptocurrency regulation in the US?
Pat Toomey, US Senator for the state of Pennsylvania, said via Twitter that the collapse of FTX has emphasized the need for establish a regulatory regime that adapts to the needs of the crypto industry and that guarantees the security of investors.
According to Toomey, there is currently a lot of ambiguity about how the cryptocurrency industry should be treated. Although various proposals seeking to provide legal clarity to the industry have been discussed in recent years, an appropriate regulatory framework has not yet been established, he noted.
However, the US senator believes that it is time to find common ground between regulators and the different players in the crypto industry to take action on the matter and establish the proper protections for investors. One starting point could be the regulation of stablecoins, the senator indicated in his message on Twitter.
This year, Senator Toomey advocated alongside Senators Cynthia Lummis and Rob Portman for a Clarification on the definition of “broker” established in the controversial Infrastructure Act, in order to exclude software developers, non-custodial actors, and cryptocurrency miners and validators from the US tax plan.
Toomey also spearheaded a proposed amendment to the Retirement Savings Modernization Act that proposes Integrating Bitcoin into 401(k) retirement plans, to diversify investment alternatives for American workers.
More lawmakers call for regulatory framework for crypto
Even though FTX is not a US exchange, US regulators have been vocal about the urgent need for crypto regulation. In addition to Toomey, others such as Patrick McHenry, Maxine Waters and Sherrod Brown are calling for crypto regulation.
Senator Cynthia Lummis also manifested that the need for comprehensive regulation in the digital asset space has become clearer now than ever. Together with Senator Kirsten Gillibrand, Lummis is promoting her proposed Responsible Financial Innovation Act to ensure investor safety and build greater trust.
Crypto industry analysts have noted that Regulations are a sign of maturity and growth in the market and that these will help Increase the confidence of institutional investors, encouraging their entry into this digital ecosystem.
Urgent protection for investors
Regulators in the United States and other countries around the world have been discussing the need to regulate the cryptocurrency industry for some time now. However, the events that the crypto industry has had to deal with this year, first with the collapse of the Terra ecosystem and now FTX, have attracted even greater interest from regulators to establish stricter regulations for the industry.
In March of this year, the United States published a Executive order aimed entirely at the crypto industryIn this, he prioritized the protection of investors and consumers, financial stability, the fight against fraud and money laundering, financial inclusion, and the pursuit of American leadership in the global financial and economic system.
In response to this executive order, the Biden administration presented guidance on how agencies should develop regulations and standards for cryptocurrencies, so that they can develop regulatory frameworks to address the needs of this industry.
Congress welcomes crypto-friendly politicians
Congressional Blockchain Caucus members Tom Emmer, Bill Foster, Josh Gottheimer and Richie Torres have arrived at the U.S. Capitol in the wake of the country's midterm elections.
Also coming to Congress are Representatives Harriet Hageman of Wyoming and Jonathan Jackson of Illinois, who have maintained a crypto-friendly stance.
In this regard, business reporter Casey Wagner of Blockworks commented that the arrival of new politicians with an open or friendly mindset towards cryptocurrencies has occurred at a crucial moment, when the crypto industry is facing one of its biggest crises.
Continue reading: The cryptocurrency regulations that set a precedent in the United States Congress
