US Congressman’s Criticism on Crypto and Digital Asset Regulation

Jul 26, 2023

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According to US Congressman Brad Sherman it is okay if the US makes money by printing it, but it’s not okay if “crypto bros” do the same.

Financial Services Committee Hearing

In a recent crypto before the Financial Services Committee, US Congressman Brad Sherman made some controversial statements. He claimed that the US does make money by printing it, and he believes this benefit goes to the American people through more services or lower taxes. Sherman also turned his attention to the digital asset industry, criticizing the intentions of what he referred to as “crypto bros”, accusing them of aiming to exploit the money-making potential of digital assets.

“Today the crypto billionaire bros have the same objective,” Rep. says Wednesday at a U.S. House markup on a crypto bill.

“All the money power PACs and lobbying is on their side … they make money by literally making money.”

— CoinDesk (@CoinDesk)

Perplexing State of Digital Asset Regulation

The digital asset industry’s regulatory landscape in the United States remains puzzling. While regulation has been desired to provide clarity, the inconsistent approaches and priorities on enforcement have only added to the confusion.

Mistaken Identity and Belittling the Creator of Bitcoin

During the hearing, Congressman Sherman made a significant mistake by wrongly referencing the creator of Bitcoin. Instead of mentioning Satoshi Nakamoto, he referred to “Saratoshi Nagamoto.” Additionally, he criticized Nakamoto’s innovativeness, connecting it to the money-making goals of digital assets, creating a confusing argument during the hearing.

The Ambitious Crypto Bill and the FTX Controversy

The House Financial Services Committee debated an ambitious bill that aimed to tailor the market structure for digital assets. However, the bill faced opposition, with some lawmakers claiming it could lead to the rise of another FTX-like scenario, referring to the disgraced founder, Sam Bankman-Fried.

Key Points of Debate and Criticism

The bill’s major point of contention among Democrats is that it grants authority over crypto to the Commodity Futures Trading Commission (CFTC), potentially weakening consumer protections provided by securities laws. Critics argue that the bill is overly complex and specific, leaving room for exploitation by crypto companies.

Republican Support and Goals of the Bill

Republican lawmakers argue that the market structure bill would bring clarity to the crypto industry and prevent crypto investments from moving offshore. They see it as an opportunity for the US to lead globally in designing a future digital economy powered by digital assets.

The Draft Market Structure Bill’s Details

The 212-page bill seeks to adapt existing market structure regulations for digital assets, offering a registration pathway with either the SEC or CFTC. It also designates the CFTC as the primary regulator for 70% of digital assets, which are considered commodities.

Ongoing Legislative Process

The House Financial Services Committee’s legislative process involves several steps, and the market structure bill is just one of many being considered. Another notable draft law on stablecoin legislation will be presented for mark-up soon.

Conclusion

The digital asset industry’s regulation remains a topic of heated debate in Congress. While some lawmakers support the proposed bill for its potential to clarify the market, others worry about its impact on consumer protections and the power it grants to the CFTC. As discussions continue, the future of crypto regulation in the United States remains uncertain.

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