U.S. senator urges legislation after FTX collapse

FILE PHOTO: U.S. Senate Banking, Housing, and Urban Affairs Committee hearing in Washington

By David Shepardson

WASHINGTON (Reuters) -U.S. Senate Agriculture Committee chair Debbie Stabenow said on Thursday the U.S. Congress needs to pass legislation in the wake of the collapse of cryptocurrency exchange FTX.

"It is time for Congress to act. The Committee, remains committed to advancing the Digital Commodities Consumer Protection Act to bring necessary safeguards to the digital commodities market," Stabenow said.

She added that she is working with the panel's top Republican John Boozman, financial regulators and others "to finalize and prepare this legislation for a committee vote."

Earlier on Thursday Senate Banking Committee Chair Sherrod Brown said it is critical that U.S. financial agencies investigate what led to the FTX collapse.

"It is crucial that our financial watchdogs look into what led to FTX's collapse so we can fully understand the misconduct and abuses that took place," the Democratic senator said.

"I’m committed to finding the best path forward to protect consumers and the stability of the U.S. markets and banking system."

Stabenow also called on financial watchdogs to act. "Until legislation is enacted, I encourage all financial regulators to use their current authorities to the fullest extent to regulate and prosecute misconduct in these markets," Stabenow said.

Also Thursday, the White House said cryptocurrencies risk harming everyday Americans without proper oversight and the latest crypto news underscores these concerns.

"The administration has consistently maintained that, without proper oversight of cryptocurrencies, they risk harming everyday Americans," White House press secretary Karine Jean-Pierre said.

In February, lawmakers and the Biden administration said they were trying to set up a new regulatory structure for digital currencies, with the Securities and Exchange Commission engaging in projects to boost scrutiny.

"We can’t afford to wait until the next crisis. Congress must work with regulators and the Biden administration to design a framework that protects consumers and our environment and keeps our markets fair, transparent and competitive," Stabenow said in February.

(Reporting by David ShepardsonEditing by Chris Reese & Shri Navaratnam)