The legislation, co-sponsored by Republican Sen. Roger Marshall of Kansas, would require cryptocurrency exchanges to verify customer identities like banks and other financial institutions do.
However, Democratic Sen. Sherrod Brown, chairman of the Senate Committee on Banking, Housing and Urban Affairs, asked the hearing’s four witnesses – two crypto proponents and two critics – whether fraud was systemic at other firms in the industry. They all indicated that it was – one of the few points of agreement in the entire hearing.
“Sam Bankman-Fried may have engaged in good old-fashioned embezzlement,” she said, “but the embezzlement was able to reach such a scale and go undetected for so long because it was crypto – shrouded in opacity, complexity, and mystique.” O’Leary also testified that Bankman-Fried told him that the collapse of FTX was due to its battle with crypto competitor Binance, which also held a stake in FTX.“These two behemoths that owned the unregulated market together… were at war with each other,” O’Leary said. “And one put the other out of business.”
Sen. Sherrod Brown, D-Ohio, chairman of the Senate Banking Committee, and Sen. Pat Toomey, R-Pa., right, the ranking member, lead a hearing on cryptocurrency and the collapse of the FTX crypto exhange and its founder Sam Bankman-Fried, at the Capitol in Washington, Wednesday, Dec. 14, 2022.
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