Senator Toomey said that The collapse of FTX is not an indictment of crypto, adding that cryptocurrency cannot be stopped and the technology would simply migrate offshore if Congress tried to do something untoward against the industry.
There was unauthorized lending of customer assets to an affiliated entity, and there were fraudulent promises to investors and customers about FTX’s operations. These are outrageous and completely unacceptable.
Senator Toomey made a crucial statement that Congress and regulators need to keep in mind:
Cryptocurrencies are actually software. What we should all understand here is one simple thing: The code committed no crime. FTX and cryptocurrencies are not the same things. FTX was opaque, centralized, and dishonest. Cryptocurrencies are open-source, decentralized, and transparent.
Toomey also addressed suggestions that have been put forward which sat crypto should be banned: To those who think that this episode justifies banning crypto, I’d ask you to think about several examples. The 2008 financial crisis involved the misuse of products related to mortgages. Did we decide to ban mortgages? Of course not. A commodity brokerage firm run by former New Jersey Senator John Corzine collapsed after customer funds — including U.S. dollars — were misappropriated to fill a shortfall from the firm’s trading losses. Nobody suggested that the problem was the U.S. dollar and that we should ban it. With FTX, the problem is not the instruments that were used. The problem was the misuse of customer funds, gross mismanagement, and likely illegal behavior.
Toomey further said in his statements: Others have suggested we refrain from addressing cryptocurrency at all, so as to not legitimize its use. This is not only misguided, it’s irresponsible.
He stressed: Individuals can also be tremendously empowered when they use cryptocurrencies. They can protect against inflation when governments irresponsibly manage their own currencies.
They can provide useful services without the need for a company or middleman. And they can let individuals preserve the freedom to transact privately
