U.S. Congressman Brad Sherman has called on the Securities and Exchange Commission (SEC) to “take decisive action to put an end to the regulatory gray area in which the crypto industry has operated.” He added that he plans to work with his colleagues in Congress in the coming weeks “to examine options for federal legislation.”

Rep. Brad Sherman on Cryptocurrency Regulation

Congressman Brad Sherman (D-CA), chairman of the subcommittee on Investor Protection and Capital Markets, released a statement regarding the implosion of cryptocurrency exchange FTX on Sunday.

FTX’s “sudden collapse” has been “a dramatic demonstration of both the inherent risks of digital assets and the critical weaknesses in the industry that has grown up around them,” the lawmaker described.

Noting that “We do not yet know the scope of financial harm caused to consumers and investors in the U.S. and around the world,” Sherman stressed:

It is crucial that we develop a clear understanding of the chain of events and management failures that led to this collapse. I fully support the efforts of U.S. regulators and law enforcement to investigate this situation and make sure those responsible are held accountable.

The congressman explained that for years, he has “advocated for Congress and federal regulators to take an aggressive approach in confronting the many threats to our society posed by cryptocurrencies.”

He noted that when Gurbir Grewal, director of the Securities and Exchange Commission (SEC) Division of Enforcement, testified before his subcommittee in July, he called on him to “pursue enforcement actions against the largest cryptocurrency exchanges for failing to register with the SEC after listing tokens on their platforms that the Commission had publicly identified as unregistered securities.” The lawmaker named XRP in particular.

Sherman opined:

I believe it is important now more than ever that the SEC take decisive action to put an end to the regulatory gray area in which the crypto industry has operated … In the coming weeks, I also plan to work with my colleagues in Congress to examine options for federal legislation.

The Congressman from California is not the only politician pushing for strict cryptocurrency regulation following the implosion of FTX. The White House and several U.S. senators have called for proper crypto oversight. Senator Elizabeth Warren (D-MA) said crypto needs “more aggressive enforcement.”