Banking Committee Chair: US Regulators Should ‘Maybe’ Ban Crypto

Senator Sherrod Brown added, though, that banning cryptocurrencies would be “very difficult” as activity would go offshore.

By Will McCurdy

Sherrod Brown is a United States senator and Chairman of the Senate Banking Committee. Image: Shutterstock.

U.S. Senator Sherrod Brown has suggested that U.S. federal agencies, such as the Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), should “maybe” consider a ban on cryptocurrencies.

During an NBC “Meet the Press” session, he did also acknowledge, however, that this ban would be “very difficult” because the crypto industry could then go offshore.

Referring to the various regulators in the U.S., he said, "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."

The senator also pointed to numerous incidents to back up his claims, not just the recent collapse of FTX but also issues such as “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.”

Earlier this month, Brown called for a collaborative approach among different government bodies when reigning in crypto, saying in a statement that “single regulatory agencies currently generally do not have a comprehensive view of crypto asset entities’ activities.”

Brown, who has held a Democratic seat in Ohio since 2007, isn’t the only senior figure in the U.S. government that is vehemently supporting harsher crypto regulation.

Senator Elizabeth Warren unveiled a new bill governing cryptocurrencies earlier this month,  dubbed the Digital Asset Anti-Money Laundering Act.

Warren’s bill would look to force crypto asset providers to offer audited financial statements and impose bank-like capital requirements more in line with what is expected of traditional financial institutions. The act would also give the SEC increased powers to regulate the asset class. 

Crypto already offshore

Contrary to Brown's statement, the uncertain regulatory future in the U.S. is already driving the crypto industry offshore.

Coinbase CEO Brian Armstrong pointed out in a Tweet that: “FTX.com was an offshore exchange not regulated by the SEC.”

Armstrong went on to claim: “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,” adding that punishing “U.S. companies for this makes no sense.”