https://ift.tt/P9KH2qSBC Sen. Brown crypto response

Dear Mr.

Thank you for sharing your thoughts regarding cryptocurrency, like Bitcoin.

In July 2021, as Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, I held a hearing where experts gave testimony on the risks and opportunities associated with cryptocurrency. At the Committee hearing, I called for increased accountability to ensure working families do not end up with all the risk in the digital asset system.

Unlike currencies issued by central banks, virtual currencies like Bitcoin – also referred to as digital assets or virtual currency – have no physical form and generally are not accepted by retailers, though a few online retailers and select locations have begun to accept Bitcoin as a cash equivalent. Digital assets are also not backed by the full faith and credit of the United States and are subject to speculation, so while they can sometimes be used like cash, they often have extreme price swings. Several virtual currency exchanges, where a virtual currency can be converted to cash or another virtual currency, have been subject to fraud and theft through hacking. As a result, virtual currencies put Americans’ hard-earned money at risk.

Federal and state regulators continue to scrutinize cryptocurrency exchange services, like digital wallets and the exchanges themselves, and the staff of the Securities and Exchange Commission (SEC) have issued a statement explaining that many crypto assets traded on exchanges appear to be securities. If it’s determined that these assets are, in fact, securities, those virtual currency exchanges would need to register with the SEC or face enforcement action for securities law violations. The SEC staff statement, which offers considerations for potential virtual currency investors, can be reviewed here: [https://www.sec.gov/news/public-statement/enforcement-tm-statement-potentially-unlawful-online-platforms-trading](https://www.sec.gov/news/public-statement/enforcement-tm-statement-potentially-unlawful-online-platforms-trading).

Virtual assets and blockchain technology have captured the public’s attention and may have useful applications. However, useful applications often use blockchain outside the realm of finance; we should support those innovations. And, I understand the arguments for cryptocurrencies as a method of reclaiming power from Wall Street. The people of Ohio have been spurned by the biggest banks with fees, minimum balances, waiting periods, and “second chance” accounts. However, Ohio communities need better solutions than start-up technologies, which largely mirror the Wall Street model. Ohioans deserve greater access to community banks in their own neighborhoods and no-fee accounts, which would allow every Ohioan to open a bank account and make purchases online.

We must be wary of the risks of emerging technology that fail to safeguard consumer finance. Scammers, fraudsters, and money launderers proliferate in the virtual currency markets, and it is critical that our financial regulators keep pace with innovation. The United States must ensure our economy remains the safest and most dependable in the world. The best thing we can do to protect Americans’ money is to adopt smart regulations that protect investors and consumers, and separate the innovators from the extortionists.

As Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, I will work with my colleagues to ensure that financial regulators, like the SEC and the Commodity Futures Trading Commission, work to protect consumers from bad actors while ensuring virtual currency innovation can continue.

Thank you again for getting in touch with me.

Sincerely,

Sherrod Brown

United States Senator

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