Failures show the need for a comprehensive crypto regulatory framework

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The failure of FTX and many other crypto companies over the past year has made clear the need for a comprehensive regulatory framework to govern the digital asset system, CUNA wrote this week to the Bank’s Financial Services Committee. House and Senate Banking Committees. Both committees conducted hearings into the FTX failure.

The threat to consumer welfare has been repeatedly demonstrated by the misrepresentations and misrepresentations presented to consumers regarding the state of their funds, the reserves held by exchanges and lenders, and the insurance status of businesses, the letter reads. Congress and federal regulators must ensure that these companies are held accountable and are no longer allowed to take advantage of consumers and the lax regulatory environment in which they currently operate.

CUNA adds that credit unions and other regulated financial institutions must have the authority to fully engage in the cryptocurrency market.

Credit union members trust their credit union to provide needed financial services, and the ability to provide new financial services products and distribution channels is necessary for credit unions to fulfill their mission, says the letter. Additionally, credit unions are focusing on financial literacy, and financial education can be extended to crypto-related products to help members use these new products with caution.

CUNA also supports the whole-of-government approach outlined by President Joe Bidens’ Executive Order in March.

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