Brad Sherman Calls Out Financial Regulators on Crypto Compliance

Cryptocurrency Regulation: A Bumpy Ride Ahead?

In the chaotic world of cryptocurrency, California Representative Brad Sherman has become a vocal critic of both crypto tycoons and the regulators that he believes aren’t doing enough to rein them in. During a November 16 hearing before the House Financial Services Committee, Sherman pointed fingers at key financial agency leaders for echoing the regulatory suggestions of former FTX CEO, Sam Bankman-Fried, instead of taking firm action against the so-called ‘crypto billionaire bros.’

Sherman’s Rant: A Call for Accountability

During the hearing, Sherman didn’t hold back. “The crypto billionaire bros are determined to get a light regulator,” he exclaimed, clearly frustrated. His remarks were directed at Federal Reserve Vice Chair Michael Barr, as well as the heads of the FDIC, NCUA, and the Comptroller of the Currency. He implied that the regulators were cozying up to crypto investors rather than creating clear, actionable regulations that would protect consumers and curb tax evasion.

What’s the Deal with Vague Regulations?

Addressing the regulatory heads, Sherman stated, “You sound like Sam Bankman-Fried, only you’re wearing long pants instead of shorts. What vague pablum!” This metaphorical jab highlights his disdain for the lack of concrete regulatory language about cryptocurrency—words he believes are merely a smokescreen that doesn’t provide real consumer protection.

Responses from the Regulators

In response to Sherman’s claims, Michael Barr acknowledged that the collapse of FTX had implications for the banking sector, urging Congress to create a framework of regulatory clarity. A nod in the right direction, perhaps, but Sherman wants real action. Additionally, Barr and his fellow regulators showed a willingness to adopt the stringent standards proposed by the Basel Committee on Banking Supervision, which might raise the regulatory bar for crypto assets in the U.S.

Past Warnings: A Precedent of Concern

This isn’t the first time Sherman has raised alarm bells about crypto regulation. Back in December 2021, while Bankman-Fried was testifying, Sherman expressed concern about crypto CEOs wielding power through lobbyists and PACs. His recurring theme suggests a long-term skepticism towards the influence of wealthy individuals in shaping regulatory environments.

What’s Next for Cryptocurrency Regulation?

Looking forward, members of the House Financial Services Committee are preparing for a hearing in December, diving deeper into the fallout from the FTX collapse. As the digital asset ecosystem continues to take shape, it’s evident that the road to comprehensive regulation is not only necessary but long overdue. With influential voices like Sherman leading the charge, could we finally see some light at the end of the tunnel, or are we just getting more vague pablum?