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upstart writes:

Senators Are Hopping Mad and Demanding Answers for the Crypto Collapse:

Lawmakers from opposing parties disagreed over who and what was truly to blame for a devastating crypto crash that left customers collectively burnout out of billions in losses during a Wednesday Senate Banking Committee hearing. While Democratic lawmakers and crypto skeptics warned of the dangers presented by a lack of meaningful oversight measures, Republicans pushed back, with some blaming part of the recent tumultuous chaos on the Securities and Exchange Commission's alleged failure to use regulatory powers already at its disposal.

[...] The lawmakers questioned three expert witnesses who held widely divergent views on cryptocurrency. Linda Jeng, the chief global regulatory officer and general counsel for major crypto advocacy group Crypto Council for Innovation, largely went to bat for the industry, while Duke Financial Economics Center Policy Director Lee Reiners and Vanderbilt University Law School Professor Yesha Yadav have spoken more critically about crypto companies.

In her testimony, Jeng, who testified under her personal capacity as an academic and researcher, tried to separate the broader crypto space from specific bad actors like FTX's Sam Bankman-Fried, and called for a light-handed, nuanced regulatory approach. Jeng said it was important for crypto firms to have clear rules of the road dictating what they can and can't do, but cautioned against overly aggressive restrictions. In addition to rules, Jeng said it was important for the U.S. to adopt a more coherent national strategy around crypto to avoid falling too far behind the E.U., U.K, and others.

"This is a key moment for our transition to a digital economy," Jeng said in her written testimony. "We are at a decision point where how we build our legal and regulatory foundation will determine our digital future for decades to come.

Reiners was far less measured. The professor said he believed crypto was "doing more harm than good to our society," and questioned some lawmakers' interest in embracing a technology, "that is undermining our sovereignty." Not mincing words, Reiners said regulators should do everything in their power to prevent crypto from seeping its way into the traditional banking sector.

"Crypto is just gambling," Reiners said, before comparing crypto to Powerball tickets.

Citing the recent FTX collapse as an example, Reiners said lawmakers and regulators should force platforms to separate customer and firm assets to prevent shady companies from investing customer funds in other areas.

Ignore, if you can, the partisan arguments. What do you think is the future of cyptocurrencies and what policies should we be adopting to help shape that future?

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