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US lawmaker blames ‘billionaire crypto bros’ for delayed legislation

US Congressman Brad Sherman, a well-known crypto-skeptic, has pointed the finger at “billionaire crypto bros” for delaying much-needed regulation of cryptocurrencies.

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

“The sudden collapse this week of one of the largest cryptocurrency firms in the world was a dramatic demonstration of both the inherent risks of digital assets and the critical weaknesses in the industry that has grown up around them.”

“For years I have advocated for Congress and federal regulators to take an aggressive approach to confronting the many threats to our society posed by cryptocurrencies,” he added.

Sherman announced his plans to work with his congressional colleagues to explore 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 crypto bros to deter meaningful legislation by flooding Washington with millions of dollars in campaign contributions and lobbying expenditures have been effective.”

“I believe it is now more important than ever that the SEC take decisive action to end the regulatory gray area in which the crypto industry operates,” the senator added.

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.

Bankman-Fried is also reported to have donated $39.8 million for the recent 2022 US midterm elections – which he said was distributed to both the Democratic and Republican parties. The figure of nearly $40 million made him the sixth largest contributor.

While Sherman advocated for an “aggressive approach” to crypto regulation, Thomas Hook, a professor of cryptocurrency regulation at Boston University School of Law, recently told Cointelegraph that regulators should look to “common sense regulation” to implement.

“[Regulators] respond to an industry that is constantly evolving, but overregulation can stifle that innovation […] poorly thought-out regulation can create a two-pronged issue: first, it can limit US consumers’ ability to participate in the cryptocurrency ecosystem and it can also drive these businesses to less regulated jurisdictions.

“It actually creates more risk for clients as it puts them in a position to deal with less regulated institutions to participate in the ecosystem,” 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 the new events.

Related: US Senators Commit to Advancing Crypto Bill Despite FTX Crash

Meanwhile, Shark Tank host and millionaire venture capitalist Kevin O’Leary said in a Nov. 11 interview with CNBC that U.S. regulators should “start with one thing” rather than regulate everything at once — with the investor recommending that the Congress with the Stablecoin starts Transparency Act.

O’Leary said that given the recent events at FTX, he believes that institutional investors are likely to put a pause on deploying “serious capital” in new investments until a legal regulatory framework is put in place:

“It will signal to everyone around the world that regulators in the United States are taking on crypto, starting to put rules in place, putting the guardrails on, nobody is going to play ball in this space at an institutional level with serious capital. until we do that .”

Among the most notable cryptocurrency bills introduced in the US Congress are the Central Bank Digital Currency Study Act of 2021, the Digital Commodities Consumer Protection Act of 2022 (DCCPA), the Stablecoin Transparency Act, and the Cryptocurrency Tax Clarity Act .

Future bills will center around President Joe Biden’s executive order in March 2022 – which will include bills aimed at improving consumer and investor protection, promoting financial stability, countering illicit financing and the US’s position in the global financial system improvement, financial inclusion, and responsible innovation.

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