US Senator Pat Toomey Says Illegal Shares in Cryptocurrency Exchange FTX Must Be Separated”completely legal and innovative cryptocurrencies.“underlines that”FTX’s collapse is not an indictment of cryptocurrencies“, he noted that”cryptocurrencies cannot be stopped“and”technology would simply migrate overseas” if Congress tried.
Separation of illegal acts from “completely legal and innovative cryptocurrencies“.
US Senator Pat Toomey explained in his opening statement to the Senate Banking Committee hearing on Wednesday that the collapse of the FTX cryptocurrency exchange is not an indictment of cryptocurrencies. .
“There have been unauthorized loans of client assets to an affiliated entity and there have been fraudulent promises to investors and customers regarding FTX operations. These facts are scandalous and completely unacceptable.“, described the senator and emphasized:
I want to highlight a bigger problem here: the wrong behavior that took place here is not specific to the underlying asset. What seems to have happened here is a complete breakdown in the management of these assets.
“In our FTX discussion today, I hope we are able to separate potentially illegal stocks from completely legal and innovative cryptocurrencies.“, he told the Senate committee.
Note that cryptocurrencies “actually is software“, Senator Pat Toomey explained: “What we all need to understand here is one simple thing: The code has committed no crime. FTX and cryptocurrencies are not the same. FTX was opaque, centralized and dishonest. Cryptocurrencies are open source, decentralized and transparent.“
Should the fallout from FTX justify banning or ‘pausing’ cryptocurrencies?
The Pennsylvania senator addressed proposals to ban cryptocurrency after the FTX collapse.
“For those who believe that this episode justifies the crypto ban, I would ask you to think of several examples“, he started. “The 2008 financial crisis involved the misuse of mortgage-related products. Have we decided to ban mortgages? Of course not. A commodities brokerage firm run by former New Jersey Senator John Corzine has collapsed after client funds – including US dollars – were misused to fill a shortfall from trading losses from the community. No one suggested that the problem was the US dollar and that we should ban it“. Senator Toomey pointed out: “With FTX, the problem is not the instruments that were used. The problem was misuse of client funds, gross mismanagement and likely illegal conduct.”
The legislator continues:
Some of my colleagues have suggested putting cryptocurrencies on hold until we can look at the problem. It is deeply misunderstood, if not impossible. Unless you adopt draconian and authoritarian policies, cryptocurrencies cannot be stopped. If we tried, the technology would simply migrate overseas.
“Should we decide to pause our constitution to stop cryptocurrencies? This is exactly the kind of thinking that has driven this business to the darker, less regulated parts of the world.“, he still thought.
Should Congress fail to regulate cryptocurrencies?
Further, the legislature said: “Others have suggested that we refrain from discussing cryptocurrency at all, so as not to legitimize its use. It’s not just wrong, it’s irresponsible“.
The senator stated: “Individuals can also wield enormous power when using cryptocurrencies. They can hedge against inflation when governments irresponsibly manage their own currencies. They can provide useful services without the need for a company or an intermediary. And they can allow individuals to retain the freedom to engage in private transactions.“
Pat Toomey also tweeted Wednesday:
The collapse of FTX is not an indictment of crypto. It is an indictment of those who have misappropriated client assets.
“As I have been saying for months, Congress needs to clarify the rules to ensure that US cryptocurrency exchanges are prudent, fair and well-regulated.“, he added.
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