Senate Banking Democrats plan bigger role in crypto legislation

After the demise of cryptocurrency exchange FTX, Senate Banking Democrats anticipate a bigger role for their committee in legislation for the industry in the next Congress after taking a back seat to the Senate Agriculture Committee this year.

Senate Banking Chairman Sherrod Brown, D-Ohio, said the committee so far had focused on drawing attention to shortcomings in the cryptocurrency sector but it would play a more active role in the next Congress. Brown and other Democrats criticized the efforts by the Agriculture Committee as too friendly to the industry. 

“Our role so far has been to continue to show the skepticism that I felt from the beginning, to put them on notice, to push the SEC to move,” Brown said in an interview. “But I look in the new Congress to be increasingly aggressive.”

The fall of FTX, valued at $32 billion before a run on customer accounts forced the exchange to declare bankruptcy last month, underlined the gaps in oversight of the cryptocurrency sector. A report that Alameda Research, FTX’s affiliated trading arm, stood on shaky financial ground prompted the run. FTX reportedly lent Alameda billions of dollars, and the two had closer financial ties than previously known. 

With Democrats retaining control of the Senate, Brown will remain chairman of the committee. But the Republican majority in the House next year means Brown will have to work with a House Financial Services Committee that is expected to be led by Rep. Patrick T. McHenry, R-N.C., to get legislation to the president’s desk.