On Sunday, the chairman of the U.S. senate banking committee announced on NBC's Meet the Press that the government should "maybe" ban crypto, before qualifying that it might drive America's crypto industry overseas, making it more "difficult" for regulators to rein in the problems linked to the nascent sector.
Democratic senator Sherrod Brown recommended that federal agencies might be the ones to institute the ban, obliquely referencing the Securities Exchange Commission or the Commodity Futures Trading Commission. "We want them to do what they need to do at the same time – maybe banning it, although banning it is very difficult because it will go offshore and who knows how that will work," he said.
The offshoring of U.S. crypto firms has been at play for a while, with Coinbase CEO Brian Armstrong claiming this in a recent tweet to Elizabeth Warren: "The problem is that the SEC failed to create regulatory clarity here in the U.S., so many American investors (and 95% of trading activity) went offshore. Punishing U.S. companies for this makes no sense," he posted.
However, Brown's statement was also sparked by a raft of scandals buffeting the crypto industry in recent months, including the FTX collapse. Adding to this, he also pinpointed other problems ranging from “the threat to national security from Korean cyber criminals to drug trafficking and human trafficking and financing of terrorism and all the things that can come out of crypto."
The move follows on the heels of other anti-crypto legislation being floated in Congress, including Elizabeth Warren's Digital Asset Anti-Money Laundering Act, which would empower the SEC to regulate crypto and requires crypto firms to show audited proof of reserves and levy capital requirements on digital assets.