5 Reasons Why FTX Bankruptcy Could Have Been Avoided With Lummis-Gillibrand Bill

U.S. Republican Senator and Bitcoin advocate Cynthia Lummis believes that with her proposed crypto legislation in place, the FTX debacle could have been prevented.

The senator took to Twitter on late Monday evening and explained why “the FTX bankruptcy wouldn’t have happened under the Lummis-Gillibrand bill.” 

In June, Lummis drafted a bipartisan bill with Democrat Senator Kirsten Gillibrand of New York advocating regulatory guidelines for the entire digital assets space. The bill is to cover the full spectrum from cryptocurrency taxation to consumer protection, but got postponed to 2023.

In the tweet to her almost 100,000 Twitter followers Lummis highlighted the areas her bill covers and could have helped the crypto industry steer away from its latest crisis. She sums up five points:

1. Clear property rights (not your keys, not your coins!)
2. Strong protection & separation of customer assets on an exchange
3. Tight limits on digital asset leverage & lending
4. Bankruptcy protection for all customers
5. Transparency into affiliates and connected organizations of an exchange

As if looking into a crystal ball, in October Lummis had said that the crypto industry has to weed out its bad players for Bitcoin to fully emerge. She stated:

“As soon as more of the bad actors can be dismissed, the better it looks for Bitcoin because of its complete decentralization and the qualities that make it digital gold. So regulation is actually good for Bitcoin because, among all the cryptocurrencies, Bitcoin is going to emerge as the gold standard.”

Considering last week’s affairs during the seven days that shook the crypto space foundations, this is exactly what is taking place right now. At time of writing, one Bitcoin is trading at $16,839 according to CoinMarketCap data.