Crypto market crash gives regulation 'more urgency,' Sen. Gillibrand says

Senate lawmakers were “alarmed” by this summer’s crypto market crash, and are becoming more interested in a bill to regulate digital assets and bolster consumer protections, Sen. Kirsten Gillibrand said on Tuesday.

“There's more urgency now, and also more of a sense that this is something we need to do,” Gillibrand said. The New York Democrat made the comments at Bloomberg’s 2022 Crypto Summit on Tuesday morning. Gillibrand and Sen. Cynthia Lummis joined the panel via video. 

Gillibrand released a wide-ranging crypto regulation bill with Lummis in June. The legislation lays out which aspects of the crypto landscape should be regulated by the US Commodity Futures Trading Commission or the Securities and Exchange Commission, among other issues.

"Most of my colleagues were fairly alarmed with the different market impacts over the last couple of months, and the number one question is: does this regulation either prevent that or improve transparency and accountability? Does it improve safety and soundness? Does it improve consumer protections? And obviously the answer is yes, that's why we wrote the bill,” Gillibrand said. “There's additional interest now because they've seen that this is something that's important to do, that consumers are not being protected today. There's no oversight and accountability, and there are no rules of the road."

Crypto legislation has been a relatively niche issue, but Washington lawmakers are looking more closely at regulation amid chaos in the crypto market, Gillibrand and Lummis said. Crypto lender Celsius declared bankruptcy earlier this month, and the TerraUSD stablecoin and Terra-based asset luna collapsed in May.

"People can see that if our bill were in effect today, there would be a way to address some of the problems that were created and that failed to protect consumers,” Lummis said. “This market is running without a statutory framework or regulation.”

The landmark bill is unlikely to pass before the end of the year, according to Lummis, because it's a "big topic." 

"It is still new to many US Senators. It's a lot for them to digest with the few remaining weeks we have in this calendar year to digest such an enormous topic," Lummis said.