US cryptocurrency legislation is being place “behind closed doors” CEO of Blockchain Association

The “work has been done” for stablecoin regulation in the United States, but many in Washington D.C. are feeling “burned” and “betrayed” in the aftermath of the FTX crash last year.

The United States Congress should take control of crypto legislation and make it a more “transparent process” in which the entire market is examined “comprehensively,” according to Kristin Smith, CEO of the Blockchain Association, a prominent U.S. crypto industry group.

Smith told Bloomberg on February 22 that the industry wants U.S. lawmakers to lead crypto legislation, despite the fact that it makes the process “extremely slow,” with regulators “stepping in” in the interim.

Smith emphasised that, despite regulators “moving extremely swiftly,” legislative development is taking place “behind closed doors,” implying that more sector participation in a “open process” involving Congress is critical.

Smith feels that the problem with regulators driving legislation through enforcement actions and settlements is due to “quite unique facts and situations.”

She explained that Congress is in a difficult situation right now since many people in Washington D.C. who “were close” to former FTX CEO Sam Bankman-Fried and FTX feel “burned” and “betrayed” by the cryptocurrency exchange’s demise in November 2022.

Smith is optimistic that stablecoin regulation will be implemented in the United States soon, stating that Congress has been looking into it “since 2019” and that “work has been done.” She stated it “came close” to happening last year before FTX went bankrupt.

She went on to say that because crypto risks differ from those of traditional financial services, regulators must devote more attention to market regulation and “tailor to those risks.”

Smith stated that working on stablecoin and “market side” regulation should take precedence over legalising crypto-related criminal activities, claiming that public ledgers make it “far more visible” than the existing financial system.

This comes after the Blockchain Association’s chief policy officer, Jake Chervinsky, stated on Twitter on Feb. 15 that the Securities and Exchange Commission and the Commodity Futures Trading Commission are “bound by legal reality,” and that “neither” has the authority to “comprehensively regulate crypto.”