Elizabeth Warren, the US Senator, said that the collapse of the FTX crypto exchange shows that ‘more aggressive enforcement’ is needed for the crypto industry.
She added that she would continue pushing the Securities and Exchange Commission (SEC) to implement the law for ensuring financial stability and for protecting consumers.
However, a lot of people pointed out that no clear crypto regulation has been outlined by the SEC, which has driven US investors to use offshore crypto exchanges, such as FTX.
It was the implosion of FTX that drove the Democratic senator to talk about more aggressive regulation for the crypto industry.
She tweeted last Wednesday that the fact that one of the biggest crypto exchanges had collapsed showed that most of the industry was running on smoke and mirrors.
She said that more enforcement was needed for the crypto industry and the SEC needed to step up. A lot of people did not agree with the Massachusetts senator.
Coinbase speaks up
Brian Armstrong, the CEO of crypto exchange Coinbase listed on the Nasdaq, also responded to the senator.
He said that FTX was not under the regulation of the SEC and was an offshore firm. But, he added that the SEC has not provided regulatory clarity in the US.
He went on to say that it was this lack of clarity that pushed many American investors offshore, claiming that 95% of the activity happened on these platforms. He said that American companies should not be punished for it.
A number of other executives at Coinbase also spoke up and were in agreement with the CEO.
Faryar Shirzad, the chief policy officer at Coinbase, said that it does not make sense to attack American companies due to the actions and failures of offshore ones.
The executive said that enforcement is essential, but it needs to begin with clear rules because those can help investors and the market.
The chief legal officer at Coinbase, Paul Grewal said that Americans had been exposed to offshore exchanges that had not been regulated and that should be the priority of the government.
Peter Brandt, a veteran trader, also spoke up after Warren and said that it was the SEC that had failed the investors.
He said that US investors suffered because of the SEC and it was not because of regulatory clarity. He added that she was targeting the wrong entities with her bullets.
Jeremy Allaire, the chief executive of Circle, was also in agreement with the Coinbase CEO. He said that he agreed with Brian because the US crypto markets do not have a sound and clear regulatory framework.
Therefore, people had no other choice and this resulted in their exposure to the supervisory authorities in offshore zones like the Bahamas and many other places.
He requested Senator Warren to help in coming up with a good policy and not just use it as an excuse to carry out enforcement.