By George Ward
US congressman Brad Sherman, a popular crypto doubter, has accused “billionaire crypto brothers” of delaying much-needed crypto regulation. Sherman said in a recent statement that the failure of FTX showed regulators the need to act quickly and forcefully:
“One of the world’s largest cryptocurrency companies that shut down abruptly this week is a dramatic example of the risks associated with digital assets and the industry that has grown around them.”
“I have urged Congress and federal agencies to act quickly to address the many threats cryptocurrencies have posed to our society for years,” he continued.
Sherman further stated his intention to work with his colleagues in Congress to consider possible federal legislation. He hopes the legislation can be implemented without being financially influenced by members of the cryptocurrency industry:
“Millions of dollars have been spent on lobbying and campaign contributions in Washington as part of successful attempts by billionaire crypto bros to thwart sensible legislation.”
The senator continued, “I believe that now more than ever, the SEC must act decisively to end the regulatory limbo that the crypto industry has navigated.”
Sherman directly referenced former FTX CEO and co-CEO over their political donations. Per multiple reports, Bankman-Fried donated $39.8 million towards the recent 2022 US midterm election, which he split between the Democratic and Republican parties.
Sherman has advocated an “aggressive approach” to crypto regulation. Still, Thomas Hook, a professor of crypto regulation at Boston University School of Law, argued that regulators should aim to pass “regulation of good meaning.”
Poorly designed regulation could result in a double whammy: First, it could limit US consumer participation in the crypto ecosystem. It could also propel those companies into less regulated countries.
Regulation Should Start With One Step Before Another
Meanwhile, multimillionaire investor Kevin O’Leary said US lawmakers “should start with one step” rather than enacting everything at once. He made the assertion while speaking as a guest during a recent CNBC show.
The investor advised Congress to start with the Transparency policy regarding the use of Stablecoin. O’Leary said that given recent FTX events, he expects institutional investors not to invest “serious capital” until an appropriate regulatory framework is in place.
“It would send a message to the world that US regulators are cracking down on cryptocurrencies. Until we do that, no one will put serious capital into this space at an institutional level.”
Future legislation will build on President Joe Biden’s executive order from March 2022. This legislation will address financial inclusion, responsible innovation, fighting illegal finance, enhancing investor and consumer protection, and promoting financial stability.