Congressman Brad Sherman Versus the Crypto Gang in Congress

[Gunnar Larson]

https://wallstreetonparade.com/2022/12/congressman-brad-sherman-versus-the-crypto-gang-in-congress/


By Pam Martens and Russ Martens: December 19, 2022 ~

Congressman Brad Sherman
Congressman Brad Sherman

There’s a dangerous and growing threat to financial stability that is being
fueled by crypto money pouring into the coffers of Republicans in Congress
– particularly those members who sit on the House Financial Services
Committee where crypto devotee Patrick McHenry (R-NC) will take over as
Chair in January.

Last month, American Prospect’s David Dayen revealed that earlier this year
when the crypto exchange FTX and other crypto firms were receiving
inquiries from the SEC, Congressman Tom Emmer (R-MN) (the newly-elected
Majority Whip) was the lead signatory to a March letter to SEC Chair Gary
Gensler signed by four House Republicans and four House Democrats,
effectively telling the SEC to back off. The letter also demanded answers
to 13 questions, some of which had the appearance of simply trying to
burden the SEC with nonsensical paperwork. For example, one question asked:

“Over the past five years, how many voluntary document requests has the SEC
sent to individuals, project teams, entities, or the like regarding
activities related to cryptocurrency, digital assets, or other uses of
blockchain technology (Relevant Entities)? Please provide a year-by-year
breakdown of these requests or an approximation if such a breakdown is not
available.”

Dayen notes in the article that “…Emmer was the head of the National
Republican Congressional Committee, the campaign arm for House Republicans,
this year. The NRCC’s associated super PAC, the Congressional Leadership
Fund, received $2.75 million from FTX in the 2022 cycle; $2 million from
[FTX executive Ryan Salame] in late September, and $750,000 from the
company’s political action committee.”

FTX has now collapsed; at least $8 billion of customers’ money is missing;
and the co-founder and CEO of FTX, Sam Bankman-Fried, has been indicted on
eight criminal counts by the U.S. Department of Justice.

But instead of being chastened by the experience, the members of Congress
whose political campaign coffers are being enriched by the crypto cabal,
are attacking the SEC for being asleep at the switch while they
simultaneously compare crypto to great innovations, such as railroads, that
experienced blips in their infancy. That narrative has now been repeated so
often by so many Republicans in Congress that it has the hallmarks of a
carefully-tailored script crafted by a crypto lobbyist and/or marketing
firm.

Despite the brazen “embezzlement” of customer funds at FTX, and the
testimony of John Ray III, the man put in charge of the bankruptcy
proceeding, that wallets on blockchain holding looted FTX assets may never
be discovered, Congressman Emmer had this to say last Tuesday at a hearing
on FTX before the House Financial Services Committee:

“Fortunately, the immutable characteristics of public blockchains – that
some people would care not to understand in this committee – allowed the
crypto community to reveal Sam Bankman-Fried’s fraud and the on chain
public record will assist law enforcement moving forward.”

The “crypto community” did not reveal any such fraud. A run on the exchange
occurred following a news article by Ian Allison for CoinDesk that sparked
panic about FTX. The run exposed the fact that funds did not exist to pay
back customers.

One Congressman at the House Hearing last Tuesday that has had his fill of
these crypto hawkers masquerading as public servants is Brad Sherman
(D-CA). Sherman knows a thing or two about accounting and law. He has a law
degree from Harvard, where he graduated Magna Cum Laude. He has previously
worked as a CPA and Certified Tax Law Specialist. He made the following
sharp comments at the hearing:

“For five years I’ve been trying to ban American investments in crypto. I’m
the only member of the House to get an F from the only crypto-promoting
organization that rates members of Congress.

“My view is that we’ll view Sam Bankman-Fried as just one big snake in a
crypto Garden of Eden. The fact is that crypto is a garden of snakes.

“Now, from the outside, crypto just looks like a non-fungible token. An
electronic pet rock for the 21st Century. Something that might be good to
invest in even though it has no apparent value because you might get
someone else to buy it from you for even more.

“But in reality the hope of crypto is to be a currency; to compete with the
U.S. dollar and to announce its advantage over the U.S. dollar in that
competition.

“It puts the advantage right in the name: crypto – ‘hidden’ currency.

“Is there a big market for that? Is there a big advantage that crypto has
over the U.S. dollar if it actually became a currency – which it’s not yet?

“Well, there are drug dealers, human traffickers, sanction evaders that
will find that to be a good feature. And, as Sam Bankman-Fried would tell
you, there’s a hell of a market for bankruptcy-court evasion. But the big
market is tax evasion.

“And I know there are some on the other side who cheer every time a
billionaire escapes taxes.

“The other announced purpose of crypto is to compete with the U.S. dollar
as a world reserve currency, thereby enriching the corporate billionaire
bros and taking thousands of dollars of advantage away from every American
family. Because we benefit from being a reserve currency.

“Now, Sam Bankman-Fried – or should I say inmate 14372 – had one purpose in
all of his efforts here in Congress. (Was a well-known figure. Only one
wearing shorts.) His one purpose was to keep the SEC out of crypto. To
provide a patina of regulation – baby regulation from the CFTC [Commodity
Futures Trading Commission]. Well, I have one comment for my colleagues:
Don’t trash Sam Bankman-Fried and then pass his bill.

“I fear that could happen because Sam was not the only crypto bro with PACs
and lobbyists and there is no PAC or lobbyist here to work for efficient
tax enforcement, or sanctions enforcement.

“Now, I’ve heard from some on the other side – criticizing the SEC. July,
in this room, I criticized the head of enforcement at the SEC for not going
after crypto exchanges. But the fact is – without objection I’d like to put
in the record a letter signed by 19 Republican members designed to push
back on the SEC – a brush back pitch if you’re familiar with baseball –
attacking the SEC for paying attention to – and I’ll quote ‘the purported
risks of digital assets.’

“And, I’d like to put in the record comments from eight members, made in
this room, that were designed to attack the SEC as being a luddite and
anti-innovation for their efforts.”

Just because Sam Bankman-Fried has been indicted and jailed, it doesn’t
mean that the U.S. is safe from the threat of crypto. The tentacles of
these frauds reach into federally-insured banks; into stock trading; and,
into campaign finance. One of the criminal counts against Sam Bankman-Fried
is campaign finance violations.
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