Recent failures of cryptocurrency and blockchain based financial platforms have demonstrated that an unregulated, unsupervised structure is not viable and poses serious risks to consumers and the economy, CUNA wrote to the Senate Agriculture Committee for its hearing on the FTX bankruptcy.

“The threat to consumer welfare has been demonstrated time and again by the misrepresentation and false statements presented to consumers regarding the state of their funds, the reserves held by exchanges and lenders, and the insurance status of the companies,” the letter reads. “Congress and federal regulators must ensure these companies are held to account and are no longer allowed to take advantage of consumers and the lax regulatory environment in which they are currently operating.”

CUNA notes that regulated financial institutions like credit unions must have the necessary authorities to fully engage in the cryptocurrency marketplace—starting with the ability to custody crypto-assets.

“Credit union members trust their credit union to provide necessary financial services, and the ability to provide new financial services products and delivery channels is needed for credit unions to fulfill their mission,” the letter reads. “Moreover, credit unions’ focus on financial literacy and financial education can be extended to crypto-related products in order to help members use these new products prudently.”

CUNA also reiterated its support for the “whole-of-government” approach to regulation outlined in President Joe Biden’s March Executive Order to ensure appropriate oversight and regulation of the marketplace.