US Senator Pat Toomey said the illegal actions by crypto exchange FTX should be separated “from legitimate and innovative cryptocurrencies.” Emphasizing that “the collapse of FTX is not an indictment of crypto,” he noted that “cryptocurrency is unstoppable” and “the technology will only go offshore” if Congress tries.
Separating Illegal Actions From ‘Legitimate and Innovative Cryptocurrencies’
US Senator Pat Toomey (R-PA) explained in his opening statement to the Senate Banking Committee on Wednesday that the collapse of the crypto exchange FTX is not an indictment against cryptocurrency.
“There are illegal loans from customer assets to affiliated entities, and there are false promises to investors and customers regarding FTX operations. This is outrageous and unacceptable,” said the senator, stressing:
I want to emphasize the larger issue here: The misbehavior that occurs here is not specific to the underlying asset. What is happening here is a complete breakdown of the handling of the asset.
“In our discussion about FTX today, I hope we can separate the potentially illegal actions from the legitimate and innovative cryptocurrencies,” he told the Senate committee.
Noting that cryptocurrencies are “actually software,” said Senator Toomey: “What we need to understand here is one simple thing: The code does not commit a crime. FTX and cryptocurrencies are not the same. FTX is opaque, centralized, and dishonest. Cryptocurrencies is open source, decentralized, and transparent.
Does FTX Fallout Justify Banning or ‘Pausing’ Crypto?
A senator from Pennsylvania went on to suggest that crypto should be banned after the FTX meltdown.
“For those who think that this episode justifies the crypto ban, I ask you to think about some examples,” he began. “The financial crisis of 2008 led to the abuse of products related to mortgages. Should we decide to ban mortgages? Of course not. The commodity brokerage company managed by former New Jersey Senator John Corzine collapsed after customer funds – including US dollars – were misappropriated to cover shortfalls from losses trading the company. No one is suggesting that the problem is the US dollar and that we should ban it. Senator Toomey emphasized: “With FTX, the problem is not the instrument used. The problem is misuse of customer funds, mismanagement, and possible illegal actions.
The MP continued:
Some of my colleagues have advised me to take a break from cryptocurrencies before I can deal with it. This is completely misguided, and incomprehensible. Short of draconian, authoritarian policies, cryptocurrency is unstoppable. If we try, the technology will go offshore.
“Are we going to decide to suspend our Constitution to stop crypto? This is the mindset that leads this activity to the dark and less regulated areas of the world,” he said.
Should Congress Refuse to Regulate Crypto?
In addition, the member of parliament said: “Others have recommended not to follow cryptocurrency, to not legitimize its use. This is not only wrong, but irresponsible.
The senator detailed: “Individuals can also be greatly empowered when using cryptocurrencies. They can protect against inflation when governments are not responsible for managing their own currency. They can provide useful services without the need for companies or intermediaries. And they can allow individuals to maintain their freedom for personal transactions.
Toomey also tweeted Wednesday:
The collapse of FTX is not an indictment of crypto. This is an indictment for someone misappropriating customer assets.
“As I’ve been saying for months, Congress needs to provide regulatory clarity so that businesses can walk into smart, prudent, and well-regulated American crypto exchanges,” he said.
What do you think about Senator Pat Toomey’s comments about FTX and cryptocurrency? Let us know in the comments section below.
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