Senators moving forward with SBF-backed bill after FTX collapse

The bipartisan authors of Senate legislation that would increase oversight of cryptocurrencies considered to be digital commodities in the U.S., like bitcoin, plan to move forward with the bill.

Embattled FTX CEO Sam Bankman-Fried had been the strongest industry proponent of the bill, known as the Digital Commodities Consumer Protection Act. The bill would grant the Commodity Futures Trading Commission, one of the two U.S. markets regulators, more power over cryptocurrency markets and exchanges.

“The recent collapse of a major cryptocurrency exchange reinforces the urgent need for greater federal oversight of this industry,” Senate Agriculture Committee Chair Debbie Stabenow, D-Mich., said in a statement. “Consumers continue to be harmed by the lack of transparency and accountability in this market. It is time for Congress to act.”

Stabenow added that she is working with her Republican counterpart on the committee, Sen. John Boozman, R-Ark., and regulators to finalize the bill in preparation for a committee vote.

Boozman also committed to move forward on the bill in his own Thursday night statement.

“In light of these developments, we are taking a top-down look to ensure it establishes the necessary safeguards the digital commodities market desperately needs,” Boozman said. “Chairwoman Stabenow and I remain committed to advancing a final version of the DCCPA that creates a regulatory framework that allows for international cooperation and gives consumers greater confidence that their investments are safe.”

Both urged regulators to use already existing powers to prosecute misconduct in the digital asset industry.

The bill has split industry. Some, outside of Bankman-Fried, are quietly supportive of the idea of clearer regulatory rules around bitcoin and — probably — ether. Others gleefully declared it “dead” as soon as FTX collapsed, and had pushed back against the idea behind closed doors even before friction over the legislation spilled out into the open on crypto Twitter. 

Leaders of the House Financial Services and Senate Banking Committees also have called for new legislation to help govern the industry in the wake of FTX’s shocking implosion.