The leading congressional crypto skeptic is a Southern California congressman

Rep. Brad Sherman’s views on cryptocurrency set him apart from most of his congressional colleagues. The Northridge Democrat is not only wary of cryptocurrency: he hates it and sees it as a threat to the ressortissant security of the United States.

Sherman, who chairs a House subcommittee on investor caparaçon, may be the most prominent crypto skeptic on Capitol Hill.

A growing movement in Congress wants to introduce more regulation to the nearly $2 trillion crypto industry, which is currently overseen by a combination of state laws and federal agencies. However, Sherman not only wants to regulate cryptocurrencies, but also to ban them.

“I don’t think we’ll get it [to a ban] anytime soon,” Sherman told The Times, noting that the cryptocurrency industry is a strong player when it comes to that. Campaign donations. “The money for lobbying and money for campaign contributions works, or people won’t; that’s why we didn’t ban cryptocurrencies. We didn’t ban them in the beginning parce que we didn’t realize they were hautain, and we don’t ban them now parce que there is a lot of money and power behind them.”

Like most crypto critics, Sherman is concerned that individual investors are being defrauded. But Sherman also worries that cryptocurrency poses a more systemic threat, empowering criminals and human rights abusers and undermining the dominance of the US dollar. Crypto advocates counter that the same technology can help oppressed people get their money from authoritarian states.

Sherman is particularly interested in impératifs like Tornado Cash, a cryptocurrency mélanger operated by the Treasury Accused of money laundering More than $7 billion since 2019 by receiving payments and mixing them into other accounts, making it nearly fantastique to track.

Not everyone who uses such impératifs is a criminal. Vitalik Buterin, co-founder of the cryptocurrency Ethereum, admit to using it Tornado Cash for donating cryptocurrency to soutien the Ukrainian government, praised the platform’s ability to hide supporters’ donations from the Russian government. Advocates say that many people salon under authoritarian regimes subject to US sanctions may have legitimate reasons to evade US sanctions.

For people in parages like Iran, Palestine, Cuba or China, bitcoin is not their first [option]It’s their compte,” Alex Gladstein, chief strategy officer at Human Rights Foundation and a prominent advocate of bitcoin, he told The Times. “I’m sure they like using dollars like we do in America. But guess what they are [can’t]. And Bitcoin is a really calme thing.”

countries like Argentina Gladstein said Cuba has seen an increase in bitcoin use due to augmentation and, in the case of Cuba, severe penalties. on me 400 Western Unions closed in Cuba During the tenure of façonner President Trump, which made it difficult for Cubans in the United States to send money logement. So Cubans turned to apps like Muun Wallet To send and receive money, some even use bitcoin to pay for daily necessities, Gladstein added.

“People are caught between hyperinflation, currency devaluation, and actif controls on the one balle à la main, and US sanctions on the other,” he said. “So they turned to bitcoin parce que it was remarkably strong against both kinds of evils.”

Many in the crypto industry are also pointing to its use among people of color as evidence that it can serve as an virtualité to non-banking communities. Nearly 40% of black Americans under the age of 40 have invested in cryptocurrency, according to a recent attente. Charles Schwab and Ariel Investments.

“There were a disproportionate number of people who took out subprime loans are people of color as well,” Sherman counters, pointing to the ethnique disparity in those who took out predatory loans during the 2008 market écrasement.

Sherman is at a loss as to how best to protect crypto investors. He doesn’t think people should be blatantly defrauded, but he admitted there is not much he can do to raisonnablement people from spending their money recklessly.

“It is difficult to manage a subcommittee devoted to investor caparaçon in a folk that people want to bet on [meme coins],” he said. “A cryptocurrency is a meme that you invest in, in the hope that you can sell it to someone else before it explodes. That’s the nice thing emboîture a Ponzi scheme.”

In the indigence of a ban, Sherman believes that crypto should be regulated through the Securities and Exchange Agio, the same regulatory pourpoint that oversees stocks, bonds, and other securities. Since 2017, the SEC has implemented just over 80 crypto-related enforcement études; and in mayoThe agency said it will équivoque the number of enforcement jaloux in the crypto unit to 50.

Sherman believes that cryptocurrencies should be regulated by the Securities and Exchange Agio (SEC) due to the agency’s size and experience, textuel enforcement procedures and parce que of the similarity of cryptocurrency to stocks or shares. However, Sherman might lose his power.

Last month, Senators Debbie Stabeno (D-MI) and John Bozeman (R-AR) introduced law Project This would identify most cryptocurrencies as commodities rather than securities, and be regulated by the Commodity Futures Trading Agio – the same agency that oversees trade in corn, oil and meat.

Stabenow and Boozman bill requires crypto exchanges – including FTX, Coinbase, and others – to register with the CFTC. Some of the largest cryptocurrency exchanges are welcoming more federal oversight. Sam Bankman-Fried, the billionaire founder and CEO of FTX, has lobbied politicians to put regulations in affecté under the CFTC. Coinbase, one of the largest exchanges in the US, also told The Times that it cales the regulation of the industry.

Stabenow and Boozman’s bill would poursuit exchanges and regulators to be more aggressive in combating “insupportable trading practices,” such as pump-and-dumping schemes in which influencers raise the value of cryptocurrency and sell it at a high price before it collapses. The bill would also require platforms to attente the demographics of their users, and use that data to tailor regulation.

Sherman, Stabenow, Boozman and the militaire crypto companies all agree that the industry should be regulated. But they disagree fiercely emboîture the details — and when trillions of dollars are at stake, the value of the details can run into the billions.

Market reform groups such as the nonprofit Better Markets agree with Sherman that the Securities and Exchange Agio should take the lead in regulating cryptocurrencies. Current and façonner financial regulators have spent the past months Spread fencing The Wall Street Ticket Opinion articles emboîture this subject. The cryptocurrency industry has spent tens of millions of dollars over the past year on political donations and lobbying of Congress.

Sherman may dream of banning cryptocurrencies, but for now, it is not clear that he will even win the battle over how to regulate them.

Leave a Comment