What Congress Should Do about Crypto Exchanges

On Monday, Sam Bankman‐​Fried (“SBF”), the co‐​founder and former CEO of bankrupt cryptocurrency exchange FTX was arrested by Bahamian authorities following his indictment by a federal grand jury in the Southern District of New York. The collapse of FTX and charges against SBF—eight criminal counts, including wire fraud, conspiracy to commit commodities fraud, and conspiracy to commit securities fraud—have brought to the fore questions of how to regulate crypto exchanges in the U.S.Congress raised these questions in a pair of hearings this week before the House Financial Services Committee and Senate Banking Committee. Jennifer Schulp testified yesterday before the Senate Banking Committee about the need for regulatory clarity for crypto exchanges; today we released a working paper offering our answers and proposing how Congress can provide such clarity for U.S. crypto marketplaces.