At a press conference in his Bronx office on Monday, U.S. Rep. Ritchie Torres (D-N.Y.) announced the introduction of two pieces of crypto legislation that, in the wake of FTX's collapse, would provide the volatile industry with transparency.
A representative for New York’s 15th congressional district entering his second term, Torres has long been an advocate for cryptocurrency adoption, writing an op-ed in March for the New York Daily News arguing that crypto could help his constituents by reducing the fees and delays pervasive in traditional finance, including for remittance payments.
The two bills, called the Crypto Consumer Investor Protection Act and the Crypto Exchange Disclosure Act, would address factors that led to FTX’s bankruptcy and the potential loss of billions in customer funds, including requiring exchanges to prove and publish their assets and liabilities, as well as prohibiting exchanges from lending, leveraging, or commingling customer funds without their consent.
“Sam Bankman-Fried is not representative of crypto finance any more than Bernie Madoff is representative of traditional finance,” Torres said. “Crypto has a place in the American economy, but it must be carefully regulated.”
Torres was joined by representatives from Bronx Crypto, a company that organizes and provides educational tools to local investors, including its co-founder, Julio Barrios, who told Fortune that he still had $1,000 locked onto FTX US.
Torres’s bills join a crowded field of crypto legislation, including the Senate Agriculture Committee’s Digital Commodities Consumer Protection, which signaled in a hearing on FTX last week that it would pause to reevaluate the bill’s language.
Torres sits on the House Financial Services Committee, which will be chaired by Patrick McHenry (R-N.C.) in the next congressional session. Along with the current chair, Maxine Waters (D-Calif.), McHenry developed his own piece of crypto legislation—a stablecoin bill—although sources familiar with the matter say that it is still under discussion and will likely wait until the next session.
Torres said he believes his bills can work in conjunction with any stablecoin legislation, arguing that the need for transparency holds true for both stablecoins and exchanges. He said there are good actors in the stablecoin space, including Circle and Paxos, but singled out Tether, which issues the largest stablecoin by market cap, as a company about which he is concerned.
Torres did not provide a timeline for when he expects discussion to begin on his legislation, citing the shift in House leadership.
Despite his condemnation of FTX, Torres has been connected to the embroiled exchange in recent articles. On Nov. 29, Blockworks reported that Torres had received campaign funds linked to Bankman-Fried but had donated his contribution to a local charity.
On Nov. 23, the American Prospect reported that Torres was part of a group of eight House members who had written a letter to SEC chair Gary Gensler questioning the agency’s authority to make informal inquiries to crypto and blockchain companies, which included FTX.
In response to a question from Fortune, Torres said that was a mischaracterization of the letter, arguing that it was about voluntary requests of information from unregulated companies.
“There’s nothing unusual about Congress asking an agency to allocate its resources efficiently,” Torres said. “I would argue the SEC had its priorities in the wrong place because it has spent more time investigating Kim Kardashian than Sam Bankman-Fried.”
