[ad_1]
The crypto industry meltdown, which began with the bankruptcy of one of the industry’s most prominent companies, did nothing to shake Minnesota Congressman Tom Emer’s faith in private digital currencies.
Delano, one of the biggest crypto boosters in Congress and currently the No.
But the collapse of the FTX trade has created new tensions in Congress and Washington over how to treat the industry, without a clear agreement on a resolution.
In an interview with The Star Tribune, Emmer focused on Congress’ role in overseeing regulators rather than passing laws regulating cryptocurrencies.
“Congress, through our oversight function, must begin that work to ensure that regulators can do their job,” he said.
Emer was highly critical of the US Securities and Exchange Commission’s handling of the cryptocurrency industry. It called the agency ineffective and opaque, and called for its chairman, Gary Gensler, to appear in parliament.
A clash on Capitol Hill seems more likely than the passage of sweeping legislation to address the many regulatory uncertainties surrounding cryptocurrencies. Whatever happens in Congress, Emmer will likely have a strong voice.
And after running the House Republican campaign division for four years, Emmer’s new leadership position as the whip of the House majority will give Minnesota more visibility on the law. Emer’s ally, Rep. Patrick McHenry (RN.C.), heads the House Financial Services Committee, which Emer is serving again this year.
Crypto computing is complicated by harsh political realities. Republicans narrowly control the House, while Democrats run the Senate and control the White House. And if Congress decides to give it a tougher look, the inherently complex nature of cryptocurrencies presents its own challenges.
“Not many members of Congress have the expertise or understanding of the cryptocurrency market and its dynamics, making them very susceptible to outside lobbyists,” said Dean Phillips of D-Minn.
Cryptocurrencies are digital currencies, Created on a distributed computer network. As the value of cryptocurrencies increased, industry players grew larger and stepped up their contributions to lobbying and campaigns.
The implosion of one of the largest cryptocurrency exchanges, FTX, has raised a particularly thorny issue for Congress. People within his FTX empire, including co-founder Samuel Bankman-Fried, made large political donations before the collapse.
Young industry but growing
Cryptocurrency speculators have made and lost big bucks. However, its use in everyday commercial transactions is still limited.
For its proponents, cryptocurrencies protect investor wealth through a decentralized financial system with no intervention from central or commercial banks.
At its core is “blockchain,” a digital technology that ensures both the security and anonymity of transactions.
To skeptics, cryptocurrencies are a financial vehicle for internet criminals, akin to Ponzi schemes at worst. of power consumption.
One thing is certain, cryptocurrency as a new financial asset raises many questions about how it should be regulated.
Congress has started paying more attention in recent years as the market value of cryptocurrencies has climbed below $3 trillion. Investors jumped in and got burned along with hedge funds Last year, when cryptocurrency prices crashed. A number of cryptocurrency companies began filing for bankruptcy last summer, culminating in FTX in November.
FTX lacked even rudimentary internal controls and accounting. Its customers have lost billions of dollars and Bankman-Fried faces federal fraud and money laundering charges.
Legislation on cryptocurrencies in Congress may be difficult after the demise of FTX. Last year, a bipartisan bill that established a regulatory framework — but ultimately never passed — was heavily supported by the crypto industry.
Hillary Allen, a professor of financial regulation and crypto skeptic at the American University School of Law in Washington, D.C., said she believes it is “pretty unlikely that Democrats will vote for crypto-friendly legislation” this year. .
More likely than legislation, she said. [House] Financial Services Commission over SEC becoming more aggressive.”
Emer tweeted last month that Gensler “must testify before Congress and answer questions about the cost of regulatory failure.”
Growing debate over regulation
Emer has long criticized the SEC’s regulation of the cryptocurrency industry. FTX’s failure gave him more ammo.
“We have Gary Gensler running the SEC with tools to protect investors in cases like this. [FTX] Emer told the Star Tribune, “Gary Gensler’s regulatory strategy has had no effect at all.”
The SEC, which declined to comment, has been criticized on many fronts since the demise of FTX.
Still, Allen said the SEC could have been more aggressive, although it was “one of the toughest crypto regulators.”
“Many regulators and lawmakers have uncritically accepted the crypto industry’s claims about innovation, efficiency, and financial inclusion.” We prioritized investor protection instead of
Much of the crypto industry’s disapproval is Gensler’s clarification that, with the exception of Bitcoin, he views cryptocurrencies as securities. According to the SEC’s website, the SEC’s division that specializes in cryptocurrencies has filed more than 90 allegations of violation against cryptocurrency companies.
In March 2022, a bipartisan group of eight members of Congress, including Emer, wrote to Gensler asking questions about the SEC’s investigation into cryptocurrency and blockchain companies, specifically information requested by the authorities.
House members said the SEC’s solicitation could violate the Paperwork Reduction Act, which regulates how federal agencies collect information from the public.
Asked whether the letter contradicted his criticism of the SEC’s weakening, Emer said his position was “absolutely consistent.”
Gensler has opted for an “opaque” regulatory approach, Emer said. This includes referring to Gensler’s meetings with Bankman-Fried and other FTX executives in October 2021 and March 2022, stating, “We want certain industry participants to come to his office and open up. It also includes negotiating regulatory benefits rather than relying on a rigid rule-making process.”
Asked about the March meeting with Bankman-Fried in an interview with Yahoo Finance, Gensler said the SEC normally meets with “market participants” and the “basic message” is to “comply.” said that
Gensler wasn’t the only regulator to meet with Bankman-Fried and FTX leaders.
U.S. Commodity Futures Trading Commission Chairman Rostin Behnham told a Senate committee on Dec. 14 that he and other CFTC representatives had raised concerns about LedgerX, FTX’s still-solvent cryptocurrency derivatives subsidiary. He said he met Bankman Freed ten times in a month.
The CFTC has regulatory authority over virtual currencies. Emer did not criticize the meetings between Behnham and Bankman-Fried, stating that “CFTC officials were not negotiating the regulatory benefits of FTX.”
complex parliament
Emer’s stance on cryptocurrencies is at odds with some Democrats.
“Republicans in the House of Representatives appear to be blaming the Biden administration for loose oversight of departments. That’s funny to me,” said Senator Tina Smith, Democrat of Minnesota.
Before FTX collapsed, some of Smith’s Democratic colleagues joined Republicans in supporting legislation that critics described as a soft approach to regulation.
The crypto industry provided campaign funding for both parties. Bankman-Fried was a big Democratic donor, but he also gave to Republicans, including the National Republican Congressional Committee (NRCC), chaired by Emmer.
Minnesota Democratic Rep. Angie Craig’s campaign received funding from Bankman Freed and Nishad Singh, director of engineering at FTX. A spokesperson confirmed that the funds will go to the bankruptcy fund.
A Smith spokesman said the donations Democrats received from Bankman-Fried and Singh were donated, but another donation from another prominent FTX figure was set aside in case it was recovered. .
Emer did not receive donations from Bankman-Fried, but his campaign was funded by two other individuals involved in the FTX empire, including Ryan Salame, co-CEO of FTX Digital Markets. Salameh was a significant Republican donor who also funded the NRCC.
Emmer’s campaign did not comment on the FTX donation. Republican Rep. Brad Finstad also received campaign funds from Salaam, but his campaign returned the donations in late November after his FTX collapse, according to his filings.
Another branch of Emer’s campaign and his political activism also received thousands of dollars from leaders of the Blockchain Association, a cryptocurrency lobbying group, according to federal records. His campaign also received donations from prominent figures in companies with significant cryptocurrency investments, including Digital Currency Group, Andreessen Horowitz and Blockchain Capital.
“I have been a strong believer in cryptocurrency technology long before it became mainstream,” Emmer said in a statement to The Star Tribune. “This issue is very important to me and I cannot get in the way of my self-interest, which is why I decided many years ago not to buy cryptocurrencies.”
For Emmer, crypto is the cause.recently Tweethe said, “Crypto is not just a financial investment, it’s about restoring individual freedom and choice.”
[ad_2]
Source link
