Volatility in cryptocurrency markets has put renewed pressure on lawmakers to regulate the industry, which isn’t subject to many of the investor protection and transparency rules governing traditional financial services.
Cryptocurrencies plummeted in May and June after so-called stablecoins that underpin the crypto ecosystem lost their value and investors shifted their money away from risky assets.
Bitcoin dipped to around $20,000, down 70 percent from its all-time high in November 2021. The total crypto market cap dropped below $1 trillion after nearly hitting $3 trillion late last year.
In response to market trouble, crypto lenders blocked users from withdrawing their funds, prompting fears that they might lose everything. Some stablecoin investors saw their assets become worthless in a matter of hours as prices plummeted.
That prompted the Treasury Department to call on Congress to regulate crypto. Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) unveiled a sweeping bill to regulate cryptocurrencies last month, but Congress won’t even begin to consider the legislation until after the November elections.
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