New crypto oversight legislation arrives in the U.S. as industry shakes

The proposal comes after 13 years, at least three crashes, dozens of scams and Ponzi schemes, and hundreds of billions of dollars made and evaporated

After 13 years, at least three crashes, dozens of scams and Ponzi schemes and hundreds of billions of dollars made and evaporated, cryptocurrencies finally have the full attention of Congress, whose lawmakers and lobbyists have papered Capitol Hill with proposals on how to regulate the industry.

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The latest bipartisan proposal came Wednesday from Sens. Debbie Stabenow, and John Boozman. It would hand the regulatory authority over Bitcoin and Ether to the Commodities Futures Trading Commission. Ms. Stabenow and Mr. Boozman lead the Senate Agriculture Committee, which has authority over CTFC.

Bills proposed by other members of Congress and consumer advocates have suggested giving the authority to the Securities and Exchange Commission.

This year, crypto investors have seen prices plunge and companies crater with fortunes and jobs disappearing overnight, and some firms have been accused by federal regulators of running an illegal securities exchange. Bitcoin, the largest digital asset, trades at a fraction of its all-time high, down from more than $68,000 in November 2021 to about $23,000 on Wednesday.

While cryptocurrencies have had crashes before, most recently in 2018, this crash has been broader and more systemic. A major hedge fund filed for bankruptcy earlier this summer, which in turn has caused other cryptocurrency brokers to collapse as well. Some crypto brokers have falsely claimed that their customers' deposits are backed by deposit insurance, like banks are.

Lawmakers, who have run out of patience with the cryptocurrency industry's attempts to live out an unregulated Libertarian, bank-free world, are now desperate to implement stringent oversight. The industry spent $9 million in 2021 on lobbying fees, according to a report by Public Citizen, a figure that is certain to be higher with all the Congressional proposals this year.