U.S. rep. calls for "aggressive approach" after FTX's bankruptcy filing

A Congress representative Brad Sherman accused "billionaire crypto bros" of deterring meaningful legislation and announced plans to develop federal laws to regulate the crypto industry.

Digital scales and crypto assets

Congressman Brad Sherman called for an "aggressive approach" in confronting threats related to cryptocurrencies. Sherman, a U.S. representative for California's 30th congressional district and the chairman of the Subcommittee on Investor Protection and Capital Markets, has long been known as a radical crypto skeptic, considering cryptocurrencies as a danger to U.S. national security,

On November 13, he released a statement addressing the FTX's bankruptcy filing, in which he targeted "billionaire crypto bros" who have managed to effectively "deter meaningful legislation by flooding Washington with millions of dollars in campaign contributions and lobbying spending."

Sherman claims that FTX's collapse demonstrates "inherent risks" related to investing in digital assets and "the critical weakness" of the whole industry. He also remarks that the exchange's bankruptcy brought about losses totaling tens of billions of dollars, although the actual scope of the financial fallout is yet to be seen.

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Sherman concludes by announcing a plan to work with his colleague congressmen to "examine options for federal legislation." He's long been a proponent of a radical approach toward regulating crypto markets, and the recent events seem to have strengthened his stance.

Earlier this year, the congressman urged SEC Division of Enforcement Director Gurbir Grewal "to pursue enforcement actions against the largest cryptocurrency exchanges for failing to register with the SEC after listing tokens on their platforms that the Commission had publicly identified as unregistered securities."

FTX filed for Chapter 11 bankruptcy protection in the U.S. on November 11. The second-largest crypto exchange worldwide collapsed in about a week, causing massive turmoil in the already troubled crypto industry.