US Lawmakers Blame ‘Billionaire Crypto Brothers’ for Legislation Delays

US Congressman Brad Sherman, a known crypto skeptic, has accused the “Billionaire Crypto Brothers” of delaying much-needed crypto regulation.

In a Nov. 13 statement addressing the collapse of crypto exchange FTX, Sherman said the exchange’s collapse demonstrated the need for immediate and aggressive action by regulators. .

“The sudden bankruptcy of one of the world’s largest cryptocurrency companies this week dramatically illustrates both the risks inherent in digital assets and the significant weakness of an industry that has grown around them.”

“For years, I have advocated for Congress and federal regulators to take a proactive approach to combating the many threats cryptocurrencies pose to our society,” he added. .

Sherman announced plans to work with colleagues in Congress to explore federal law options. We hope this can be done without financial repercussions for members of the cryptocurrency industry.

“So far, millions of dollars have poured into Washington in donations and lobbying spending on campaigns to deter meaningful legislation by billionaire crypto bloggers.”

“I believe it is more important than ever for the SEC to take decisive action to end the regulatory gray zone in which the crypto industry has operated,” the senator added. rice field.

Sherman directly referenced former FTX CEO Sam Bankman-Fried and political donations to Democrats, but also to FTX co-CEO Ryan Salaam, who donated to Republicans in 2022.

Bankman-Fried was also reported to have donated $39.8 million to the recent 2022 US midterm elections, which he said was split between both Democrats and Republicans. The figure of nearly $40 million made him his sixth largest contributor.

While Sherman advocates a “proactive approach” to cryptocurrency regulation, Thomas Hook, a professor of cryptocurrency regulation at Boston University Law School, recently told Cointelegraph that regulators are “common sense.” We should look to implement “restrictive regulation”, he said.

“[Regulators] Keeping up with an ever-evolving industry, but over-regulation can stifle innovation […] A poorly thought out regulation can cause two problems. First, it could limit the ability of U.S. consumers to participate in the cryptocurrency ecosystem, and it could force these businesses into less regulated jurisdictions. ”

“This actually puts customers in a position to participate in the ecosystem by trading with less regulated institutions, which actually poses more risk to them,” he added.

However, his comments were made before the collapse of the FTX crypto exchange. Cointelegraph reached out to Hook to understand if his position has changed in light of new events.

Related: US Senators Promise Forward on Crypto Bill Despite FTX Collapse

Meanwhile, Shark Tank host and billionaire venture capitalist Kevin O’Leary said in an interview with CNBC on Nov. We have to start with one thing,” he said. transparency law.

O’Leary said that given recent events at FTX, institutional investors could pause putting “serious capital” into new investments until a legal regulatory framework is put in place. I think it has a high potential.

“It will let everyone in the world know that U.S. regulators are accepting cryptocurrencies, starting to put rules in place and putting in place guardrails. No one will ever play ball at the institutional level.” ”

Some of the most notable cryptocurrency bills before the U.S. Congress include the Central Bank Digital Currency Research Act of 2021, the Digital Goods Consumer Protection Act (DCCPA) of 2022, the Stablecoin Transparency Act, and the Cryptocurrency Tax Clarity Act. .

Future legislation will be centered around President Joe Biden’s Executive Order in March 2022. This includes improving consumer and investor protection, promoting financial stability, combating financial malpractice, enhancing the United States’ position in the global financial system, financial inclusion, and responsible innovation.