Members of Congress listen via video conference as FTX CEO, Sam Bankman-Fried testifies on Wednesday. Photo: Stefani Reynolds/Bloomberg via Getty Images
We're not the Wild West — but give us clearer rules of the road: This was the message to Congress from the heads of six cryptocurrency companies on Wednesday.
Why it matters: Never before have crypto executives been hauled to Washington like this. It was the highest-profile attempt by the industry to plead its case.
Panelists took a shot at pitching preferred rules.
- "The solution is not to shoehorn digital assets into a regulatory system designed for earlier generations of financial assets," said Charles Cascarilla, CEO of Paxos, which issues stablecoins, digital currencies whose value is pegged to an asset (like the U.S. dollar).
- "The single biggest thing is just ensuring the reserves are what they say they are. What if there is a trillion-dollar stablecoin with only a billion dollars actually backing it," says Sam Bankman-Fried, CEO of crypto exchange FTX, who called for "periodic third-party audits."
The intrigue: Bitfury CEO Brian Brooks, formerly the acting chief of a bank regulator, said there's no need for new regulatory powers — fold the crypto industry into existing systems.
- "You have on this panel a big stablecoin issuer who has applied for a bank charter. It doesn't look like they are going to get it. The easiest way to supervise them would be to let them in the banking system," said Brooks, referring to Circle, a key member of the organization managing the stablecoin USDC.
The bottom line: The hearing didn't clear up how lawmakers will clamp down on the industry. What's clear is they still have big concerns about fraud, manipulation and abuse.