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Crypto market blowups exposes enormous risk among crypto firms: U.S. Senator

During a hearing in the Senate on July 28, Sen. Sherrod Brown ripped into those who defrauded investors in the cryptocurrency market, showing a renewed sense of urgency to regulate digital assets after the market meltdown that occurred in the summer.

“We’ve witnessed spectacular blowups in the crypto markets, exposing both the alarming interconnectedness and the enormous risks among crypto firms,” Brown said.

The remarks were made by Brown, who is the head of the Senate Committee on Banking, Housing, and Urban Affairs, at a hearing on Thursday on fraudulent activities using cryptocurrencies. The event was named “Protecting Investors and Savers: Understanding Scams and Risks in Crypto and Securities Markets.”

The Democrat from Ohio made the suggestion that the industry’s regulators should “do more” to develop standards for the sector. The meeting took place only a few days after the collapse of a stablecoin agreement between the chairwoman of the House Financial Services Committee, Maxine Waters, and the senior Republican on the committee, Patrick McHenry.

“We will put pressure on our regulatory bodies to do more as this Committee and the American people get a deeper understanding of crypto-based investments and the ways in which con artists are expanding their operations. It goes without saying that this refers to the SEC. It also refers to the authorities in charge of regulating banks,” Brown stated.

The industry shouldn’t be able to create the rules that they wish to play by, since it’s not fair to other players. In a letter that he sent to executives at tech giants Apple and Google, Brown also focused on the potential for fraud using cryptocurrencies and cryptocurrency-related activities. 

Last week, the Securities and Exchange Commission (SEC) made news when it announced that it will investigate Coinbase and classified nine crypto tokens as securities. This action garnered a lot of media attention.

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Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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