Senate Banking FSOC Hearing Sees Some Crypto Discussion

Senate Banking

The Senate Banking Committee hearing titled, “The Financial Stability Oversight Council Annual Report to Congress,” took place with U.S. Treasury Secretary Janet Yellen taking questions from members on behalf of FSOC, which she leads.

See the recorded video.

Secretary Yellen’s prepared opening testimony included remarks on digital assets asking for Congress to act on creating a regulatory framework, which largely reflected her digital assets testimony at the House Financial Services FSOC hearing earlier in the week.

“… the Council is focused on digital assets and related risks such as from runs on crypto-asset platforms and stablecoins, potential vulnerabilities from crypto-asset price volatility, and the proliferation of platforms acting outside of or out of compliance with applicable laws and regulations. Applicable rules and regulations should be enforced, and Congress should pass legislation to provide for the regulation of stablecoins and of the spot market for crypto-assets that are not securities. We look forward to continuing to engage with Congress on this.”

Chair Sherrod Brown (D, OH) guided the day’s agenda on behalf of the Majority Democrats. Ranking Member Tim Scott (R, SC), a possible candidate for Vice President on former President Donald Trump’s 2024 ticket, led the Minority Republicans. Continue reading “Senate Banking FSOC Hearing Sees Some Crypto Discussion”

Senate’s FTX Hearing Highlights Fraud Vs Crypto Skeptic Debate

Senate Banking

The Senate Banking Committee convened another Congressional hearing today about the FTX implosion titled, “Crypto Crash: Why the FTX Bubble Burst and the Harm to Consumers”.

See the video of the hearing.

Yesterday’s House Financial Services Committee hearing on FTX was hard to top with the current CEO of FTX delivering an indictment of the past CEO Sam Bankman-Fried (SBF), his company’s past performance and even the Bahamian government.

Chair and Sen. Sherrod Brown’s (D, OH) opening statement did not hesitate to address his extreme skepticism of crypto with nothing redeeming to say about the digital currency industry and blockchain technology. He added, “Crypto doesn’t get a free pass because it’s shiny and bright.”

National security, Facebook’s Libra, terrorist financing and more were examples of crypto’s effects that had metastasized for Sen. Brown into a global blight.

Conversely, Ranking Member Sen. Toomey (R, PA) sought to differentiate between the alleged fraud of FTX and the software, code and innovation activating cryptocurrency today.

Sen. Toomey chided those who wanted to stop crypto saying that it cannot be and, in fact, represents a fundamental misunderstanding of the technology. He suggested that those who call for not addressing crypto with legislation at all are misguided. He promoted his own Stablecoin Transparency Act as an important step in providing guardrails for crypto’s growth, let alone the use of blockchain technology.

Continue reading “Senate’s FTX Hearing Highlights Fraud Vs Crypto Skeptic Debate”

Centralization Villain Gets More Hearings While Decentralization Watches

Hearings on FTX

With FTX continuing to burn like a sun that never sets, Congress is undertaking its review of the cryptocurrency exchange’s implosion with two hearings this week – one quotable,  the other that checks a box.

Hearing #1 – likely very quotable

On Tuesday, December 13 at 10:00a, Chairwoman Maxine Waters (D, CA), Ranking Member Patrick McHenry (R, NC) and the House Financial Services Committee convene a hearing titled  “Investigating the Collapse of FTX, Part I.” (Live stream)

The scheduled witness list for the House Financial Services hearing is exactly who you’d want, at a minimum, for a one-day hearing: the current CEO and the former one:

      • John J. Ray III, current Chief Executive Officer, FTX Group
      • Sam Bankman-Fried (SBF), Founder and Former CEO, FTX Group

Read the HFS Committee’s hearing memorandum here.

Mr. Ray is well-known for his work in corporate disasters such as Enron and Nortel where Mr. Ray led teams of lawyers to find the best way out possible for shareholders, creditors and customers alike. Read this profile from Ray’s hometown paper for more.

The ignominious FTX founder, SBF, created still more drama around “will he” or “won’t he” appear for the Committee in recent Twitter banter (1, 2, 3, 4) with Chairwoman Waters. As of this writing, he says he’ll appear -likely by video. Rumors had swirled whether Chairwoman Waters would use her subpoena powers to compel SBF to testify. Complicating matters was SBF’s Bahamian location.

It was only one year ago – almost to the day – that  SBF was throwing bouquets to House Financial Services after a Committee appearance and tweeting, “A huge thanks to @MaxineWaters, @PatrickMcHenry, and the whole House Financial Services Committee for having us today to talk about the future of digital assets. The meeting was productive and I’m really grateful for the engagement and thoughts from policymakers.”

With Chairwoman Waters and Ranking Member Rep. Patrick McHenry’s work on stablecoin legislation waiting in the wings, it would seem tough questions will be prepared for Mr. Bankman-Fried.

Top 10 questioners to watch on HFS:
Continue reading “Centralization Villain Gets More Hearings While Decentralization Watches”