USA: After 13 years, at least three crashes, numerous frauds and Ponzi schemes, and hundreds of billions of dollars made and lost, cryptocurrencies are finally receiving the full attention of Congress, whose representatives and lobbyists have flooded Capitol Hill with ideas for how to regulate the sector.

Sens. John Boozman (R-Arkansas) and Debbie Stabenow (D-Michigan) released the most recent bipartisan proposal on Wednesday. It would give the Commodities Futures Trading Commission control over the regulation of bitcoin and ether. The Senate Agriculture Committee, which has jurisdiction over CTFC, is led by Stabenow and Boozman.

Consumer advocates and other lawmakers have proposed bills that would transfer authority to the Securities and Exchange Commission.

Investors in cryptocurrencies have seen prices collapse this year, businesses collapse, and fortunes and jobs vanish over night. Some companies have even been charged by federal regulators with operating an unauthorised securities exchange. The largest digital asset, bitcoin, is currently only worth a small portion of its previous peak; it went from over US$68,000 in November 2021 to about US$23,000 on Wednesday.

Although there have been previous cryptocurrency crashes, the most recent one in 2018 was more widespread and systemic. This summer, a significant hedge fund declared bankruptcy; as a result, other cryptocurrency brokers also failed. Some cryptocurrency brokers have made untrue claims that the deposits of their clients are covered by deposit insurance, just like banks are.

The cryptocurrency industry's attempts to live in an unregulated, libertarian, bank-free world have worn thin on lawmakers, who are now eager to enact strict oversight. According to a report by Public Citizen, the industry paid lobbying fees totaling $9 million in 2021; however, given all the Congressional proposals this year, this amount is certain to increase.

The cryptocurrency industry, which views the CFTC as a more industry-friendly regulator than the SEC, would benefit from the Stabenow-Boozman bill. The CFTC is much smaller than the SEC, which had a budget of nearly US$2 billion and 4,500 full-time employees in 2016. The SEC had a budget of US$304 million and employed about 666 people.

According to Cory Klippsten, CEO of Swan Bitcoin, "the cryptocurrency industry is trying to get anyone other than the SEC to regulate them." Although he supports bitcoin, Klippsten has a deep distrust for much of the broader crypto industry, which he believes has given rise to a number of tokens and other coins that are nothing more than frauds.

Bitcoin billionaire Sam Bankman-Fried tweeted his support for the Stabenow-Boozman bill. Bankman-Fried has donated millions of dollars to mostly Democratic-leaning candidates and Super PACs. In a call with reporters, Boozman stated that the CFTC is the preferred option for the industry to regulate cryptocurrency.

They seem to agree on this, he said.

Stabenow and Boozman acknowledged in a press conference that while they believe the CFTC is capable of regulating cryptocurrencies, the agency would require assistance. By imposing user fees on the cryptocurrency industry, the bill seeks to address staffing issues with the CFTC, which already regulates futures contracts for bitcoin and ethereum. The CFTC would then use those funds to support more thorough industry regulation. The bill would leave it up to the SEC to potentially exercise its regulatory authority over crypto-like products like tokens or non-fungible tokens (NFTs).

Naturally, the CTFC will need more resources if they want to act quickly in this area, Stabenow said.

Despite the crashes, consumers are still interested in investing in digital assets, according to Marlon Cumberbatch, who conducts consumer research on cryptocurrencies and other digital assets for the National Research Group. In terms of investor interest, "some people believe this is the beginning of the end" for cryptocurrencies, Cumberbatch said. "But we believe this is the end of the beginning." This year, Congress has released a growing number of proposals that, in various ways, attempt to address the issues facing the cryptocurrency industry. The Stablecoin TRUST Act, introduced by Pennsylvania senator Pat Toomey (R), would establish a framework for regulating stablecoins, which have suffered significant losses this year. A type of cryptocurrency known as a stablecoin is anchored to a particular value, typically the US dollar, another coin, or gold. Senators Kirsten Gillibrand of New York and Cynthia Lummis of Wyoming introduced the Responsible Financial Innovation Act in June. In addition to requiring the IRS to adopt guidelines on merchant acceptance of digital assets and charitable contributions, this bill proposed legal definitions of digital assets and virtual currencies and made the distinction between digital assets that are commodities and those that are securities—something that has not yet been done The Stabenow-Boozman bill is also supported by Senators John Thune of South Dakota and Cory Booker of New Jersey. The House Financial Services Committee is currently working on a proposal in addition to the Toomey legislation and the Lummis-Gillibrand legislation, but those discussions have stalled.

While she, top Republican member Patrick McHenry of North Carolina, and Treasury Secretary Janet Yellen had made significant progress toward an agreement on the legislation, Maxine Waters, chair of the committee, stated last month that "we are unfortunately not there yet, and will therefore continue our negotiations over the August recess."

In a report published in November of last year, President Joe Biden's working group on financial markets urged Congress to enact legislation governing stablecoins. Earlier this year, Biden issued an executive order directing various agencies to consider ways to regulate digital assets.

Ukraine conflict: US Senate backs Finland and Sweden's NATO bids

US stuck in a 'horrible plateau' of Covid Casualties

Mainland China begins a war game encircling Taiwan after Pelosi ends her visit to the island