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Citing the implosion of FTX, US lawmakers on Tuesday expressed concern concerning the dangers posed to retail buyers and the broader monetary system, and stepped up their requires extra stringent oversight of cryptocurrencies at a listening to with the nation’s high banking regulators.

“This should be a renewed call for Congress to take a serious look at crypto exchanges and lending platforms, many of which engage in risky behaviours while marketing themselves as safe for consumers,” Bob Menendez, the Democrat senator from New Jersey, informed his colleagues and banking regulators, which included the Federal Reserve’s vice chair for supervision, Michael Barr, and the appearing head of the Comptroller of the Currency, Michael Hsu.

Cynthia Lummis, the Republican senator from Wyoming, who has co-written a bipartisan invoice that sketches out an entire regulatory framework for digital belongings within the US, described the FTX turbulence as “awful and simultaneously not all that surprising”. 

“It’s obvious that Congress needs to regulate digital assets,” she added.

Patrick Toomey, the highest Republican on the committee, slammed the regulators specializing in points that he mentioned are exterior of their mandates, together with climate-related monetary dangers, and in flip failing to supply the mandatory steering for banks about crypto actions.

“While some of our banking regulators have been distracted, they’ve failed to address real challenges facing the financial system,” Toomey mentioned. “The ambivalence of the remaining agencies has helped to push crypto activities into foreign jurisdictions with weaker or no regulatory regimes.”

On Tuesday, Barr warned of the potential for “systemic risk” ought to “interlinkages develop” between the crypto system and extra conventional corners of the finance.

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