As organizations that share a commitment to investor choice, we write to express strong concern that the Digital Commodities Consumer Protection Act (S. 4760), as currently drafted, does not contemplate any safeguards with respect to injured investors’ ability to hold digital commodity issuers, brokers, and affiliated entities, accountable for misconduct. Decades of experience with the investment adviser and brokerage industry demonstrate that any legislation lacking such explicit safeguards will, inevitably, open the door to the use of forced arbitration contracts, class action waivers, and forum selection clauses – all of which are demonstrably harmful to consumers.
Such protection is critical as we’ve continued to witness devastating crypto collapses this past year, from lender Celsius Network, to coin project Terraform Labs, to hedge fund 3AC, and most recently, FTX’s bankruptcy filing. Unsecured creditors, including institutional investors managing retirement savings, have been forced to write down hundreds of millions of dollars on losses, while individual retail investors also find themselves losing tens of thousands of dollars in investments. Investors must be able to access the court system and retain the ability to hold these corporations legally accountable when such wrongdoing occurs.
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