US Representative Brad Sherman said Congress did not ban cryptocurrencies because “there is a lot of money and power behind it.” He explained, “The lobbying and campaign contributions work, or people won’t, which is why we haven’t banned cryptocurrency.”
US legislator on regulation and why Congress won’t ban encryption
Congressman Brad Sherman (D-CA) shared his views on cryptocurrency and its regulation in an interview with the Los Angeles Times, published on Sunday.
The US lawmaker from California, who chairs a House subcommittee on investor protection, wants to ban cryptocurrencies but does not believe Congress will take such action. “I don’t think we’re going [ban crypto] anytime soon.”
“The money for lobbying and money for campaign contributions is working, or people won’t, which is why we haven’t banned crypto,” Sherman explained.
We didn’t ban it at first because we didn’t realize it was important, and we didn’t ban it now because there’s a lot of money and power behind it.
Not only is the congressman concerned that individual investors are being defrauded, but he also views cryptocurrencies as a threat to the national security of the United States. He believes that cryptocurrency poses a systemic threat, empowers criminals, and undermines the dominance of the US dollar.
The lawmaker is particularly concerned about cryptocurrency mixing services such as Tornado Cash. In August, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) banned the Ethereum mixing app, claiming that the mixer helped North Korean hackers like the hacking syndicate known as the Lazarus Group.
Sherman admitted that there was not much he could do to prevent investors from spending their money recklessly. “It is difficult to manage a subcommittee devoted to investor protection in a country that people want to bet on [meme coins]”, said the US legislator, emphasizing:
Cryptocurrency is a meme that you invest in, hoping that you can sell it to someone else before it explodes. That’s the nice thing about a Ponzi scheme.
Sherman proceeded to discuss crypto regulation in the absence of a ban. Pegging cryptocurrency to a stock or security, he believes the Securities and Exchange Commission (SEC) should oversee the crypto sector, citing the regulator’s size, experience, and strict enforcement measures.
However, three bills were introduced in Congress this year to make the Commodity Futures Trading Commission (CFTC) the primary regulator for the cryptocurrency industry.
In July, Sherman urged the Securities and Exchange Commission to monitor major cryptocurrency exchanges that have traded XRP. The Securities and Exchange Commission said in January that it had taken 97 enforcement actions related to cryptocurrency. In May, the regulator said it had doubled the size of its crypto enforcement unit.
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