Bronx Rep. Ritchie Torres introduces crypto legislation to bring transparency to exchanges
After FTX's collapse, U.S. Rep. Ritchie Torres (D-NY) announced the introduction of two pieces of crypto legislation that would provide transparency to the volatile business at a news conference in his Bronx office on Monday.
Torres, a congressman for the 15th congressional district of New York who is about to begin his second term, has long been a proponent of the use of cryptocurrencies. In an opinion piece he wrote for the New York Daily News in March, he argued that crypto could benefit his constituents by reducing the fees and delays common in traditional finance, including for remittance payments.
The Crypto Consumer Investor Protection Act and the Crypto Exchange Disclosure Act would prohibit exchanges from lending, leveraging, or combining customer funds without their consent. These two bills would address the factors that contributed to FTX's bankruptcy and the potential loss of billions in customer funds.
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Sam Bankman-Fried is not an example of the cryptocurrency finance industry, just as Bernie Madoff is not an example of the conventional financial industry, according to Torres. The American economy needs cryptocurrency, but it needs to be carefully regulated.
Representatives from Bronx Crypto, a business that coordinates and offers educational resources to regional investors, including its co-founder Julio Barrios, who told Fortune that he still had $1,000 locked onto FTX US, were present with Torres.
The Senate Agriculture Committee's Digital Commodities Consumer Protection bill, which indicated in a hearing on FTX last week that it would halt to examine the bill's terms, is one of many crypto-related pieces of legislation that Torres' bills join.
Torres is a member of the House Financial Services Committee, which in the upcoming congressional term will be led by Patrick McHenry (R-N.C.). Stablecoin legislation was created by McHenry and the current chair, Maxine Waters (D-Calif.), but according to people with knowledge of the situation, it is still under consideration and will probably wait until the next session.
Torres asserted that the need for openness applies to both stablecoins and exchanges, and that he feels his ideas can complement any stablecoin law. However, he singled out Tether, which issues the largest stablecoin by market cap, as a firm about which he is concerned. He claimed that there are reputable actors in the stablecoin industry, like Circle and Paxos.
Torres cited the change in House leadership as the reason he did not provide a timetable for when he anticipates discussion to start on his measure.
Torres has criticized FTX, but new headlines have linked him to the contentious exchange. Blockworks revealed on November 29 that Torres had received Bankman-Fried-related campaign cash but had donated his portion to a nearby charity.
On Nov. 23, the American Prospect reported that Torres was one of eight House members who questioned the SEC's power to contact FTX and other cryptocurrency and blockchain firms in an open letter to Gary Gensler, the chairman of the SEC.
Torres claimed that was a mischaracterization of the letter in response to a query from Fortune, claiming that it was about voluntary requests for information from unregulated businesses.
According to Torres, it is not rare for Congress to request that an organization spend its resources effectively. "I would contend that the SEC had the incorrect priorities because it spent more time looking into Kim Kardashian than Sam Bankman-Fried."
source: fortune.com/crypto/2022/12/05/bronx-rep-ritchie-torres-introduces-new-crypto-legislation/