US congressman Brad Sherman, a well-known crypto skeptic, has called out “billionaire crypto bros” for delaying much-needed crypto regulation.
In a Nov. 13 statement on the collapse of cryptocurrency exchange FTX, Sherman said that the exchange’s implosion has demonstrated the need for regulators to take immediate and aggressive action.:
“The sudden collapse this week of one of the world’s largest cryptocurrency companies has been a dramatic demonstration of both the inherent risks of digital assets and the critical weaknesses of the industry that has grown up around them.”
“For years I have advocated that Congress and federal regulators take an aggressive approach to confronting the many threats that cryptocurrencies pose to our society,” he added..
Sherman announced his plans to work with his congressional colleagues to examine options for federal legislation.which he hopes can be carried out without the financial influence of members of the cryptocurrency industry:
“To date, efforts by billionaire cryptobros to deter significant legislation by flooding Washington with millions of dollars in campaign contributions and lobbying spending have been effective.”
“I believe that It is important now more than ever that the SEC take decisive action to end the regulatory gray area in which the cryptocurrency industry has operated,” he added. the senator.
While Sherman made a direct reference to former FTX CEO Sam Bankman-Fried and political donations to the Democratic Party, he also mentioned Ryan Salame, the co-CEO of FTX, who donated to Republicans in 2022..
It was also reported that Bankman-Fried had donated $39.8 million in the recent 2022 US midterm elections, which she said was distributed to both the Democratic and Republican parties.. The figure of almost USD 40 million made him the sixth largest contributor.
While Sherman has advocated an “aggressive approach” to crypto regulation, Thomas Hook, a professor on crypto regulation at Boston University School of Law, recently told Cointelegraph that regulators should look to implement “common sense regulation”:
“[Los reguladores] they are reacting to an industry that is constantly evolving, but over-regulation could stifle that innovation […] Poorly thought-out regulation could create a double whammy: first, it could limit the ability of US consumers to participate in the cryptocurrency ecosystem, and it could also drive these businesses into less regulated jurisdictions.”
“This actually creates more risk for clients as it puts them in a position of dealing with less regulated institutions to participate in the ecosystem,” he added..
His comments were made before the collapse of cryptocurrency exchange FTX.. Cointelegraph has contacted Hook to understand if his position has changed in light of the new developments.
Meanwhile, Shark Tank host and millionaire venture capitalist Kevin O’Leary stated in a November 11 interview with CNBC that US regulators “need to start with one thing” instead of regulating everything at once.and the investor recommended to Congress to start with the Stablecoin Transparency Act.
O’Leary said that, given recent events at FTX, believes institutional investors will likely pause deploying “serious capital” in new investments until a legitimate regulatory framework is in place:
“That would be a signal to the whole world that US regulators are taking cryptocurrency seriously, starting to put down the rules, putting up the railings, no one is going to play in this space at an institutional level with serious capital until we do. ”
Among the most notable cryptocurrency bills that have been introduced in the United States Congress are the Central Banks Digital Currency Review Act of 2021, the Digital Products Consumer Protection Act of 2022 (DCCPA) , the Stablecoin Transparency Law and the Cryptocurrency Fiscal Clarity Law.
Future bills will focus on President Joe Biden’s March 2022 executive order, which will include bills aimed at improving consumer and investor protection, promoting financial stability, financial inclusion and responsible innovation, counter illicit finance and improve the position of the United States in the global financial system.
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