Samuel Bankman-Fried, creator and director of FTX. Source: Capture of a video, Youtube/CNBC Television
Providing greater regulatory clarity is the most essential thing that can be done to attract crypto innovators to the US, FTX Director Sam Bankman-Fried told Senate members.
He was speaking at a hearing on digital assets at the US Senate Committee on Agriculture.
At the hearing, titled Examining Digital Assets: Dangers, Regulation and Innovation, Democratic Senate Member Debbie Stabenow, chair of the Senate Agriculture Committee, said she thinks the presence of unregulated offshore markets for digital assets poses "dangers." inadmissible for users" in the USA.
“Getting clarification on the cryptocurrency cash market would be really great for the industry,” Bankman-Fried responded, noting that a lot of institutional capital is waiting for that to happen before jumping straight into digital assets.
Furthermore, the CEO of FTX suggested that a digital token registration process would be useful in order to bring the business back to the US.
"There is a lot of activity outside the US now as there is no clear registration process for tokens," he said.
“We're in a situation where ninety-five percent of current volume is offshore, and it would be great to see a lot of that pullback. Bankman-Fried added.
Commenting more directly on the benefits that digital asset markets can provide to users, Bankman-Fried highlighted how crypto markets, unlike traditional financial markets, provide “fair access” for everyone.
For example, he stated that market data in the digital asset space is generally free and transparent to all, and all users can place orders directly with an exchange.
This differs from the situation in traditional financial markets, where most users cannot send their orders directly to the exchange's matching engine. Instead, ordinary users must rely on intermediaries that “add latency, increase fees and decrease transparency” in ways that result in “a less favorable market structure,” Bankman-Fried explained.
The hearing in the Senate Agriculture Committee on Thursday followed another hearing on stablecoin regulation in the US House Committee on Financial Services on Wednesday. The hearing uncovered a strong divide among lawmakers on how stablecoin transmitters should be regulated.