Crypto Likely Won't Be Banned Anytime Soon, Says California Congressman

In Brief

• Rep. Brad Sherman claimed that the "money and power" will prevent crypto from being outlawed 'anytime soon.'
• Congressman Sherman is a well-known cryptocurrency skeptic who has raised concerns around the sector.
• As policymakers remain divided on crypto legislation, Sherman wants the SEC to overlook the virtual asset class.
  
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Congressman Brad Sherman, a well-known cryptocurrency skeptic, claimed that the “money and power” that support the sector will prevent crypto from being outlawed at the moment.

Sherman told The Times, “I don’t think we’re going to get [to a ban] anytime soon.”

‘Too much money and power’ backing crypto
“Money for lobbying and money for campaign contributions works, or people wouldn’t do it, and that’s why we haven’t banned crypto. We didn’t ban it at the beginning because we didn’t realize it was important, and we didn’t ban it now because there’s too much money and power behind it,” the Democratic Representative explained.

Sherman has been constantly raising concerns around virtual digital assets, for both investors and the financial system at large, hoping to get them banned. Last year, he stated, “Cryptocurrencies have the political support of patriotic anarchists who are rooting for tax evasion. I hope we shut it down.”

Crypto lobby engaging with Washington
A local report published last year also revealed that the cryptocurrency sector would in fact spend 2022 lobbying for legislative clarity through Congress.

Kristin Smith, executive director of the Blockchain Association had told Roll Call, “I think that crypto received the message that they need to constructively engage in Washington, and they’re taking it seriously.”

However, the cryptocurrency lobby also has to deal with partisan policymakers.

Interestingly, Congressman Sherman’s stance is in contrast to what Congressman Tom Emmer has been pushing in the bipartisan Blockchain Caucus. He also noted in December last year that cryptocurrency policy is not becoming partisan even when it appears otherwise.

“Education is key to orange pilling, and FSC’s last crypto hearing reaffirmed that crypto is very much still nonpartisan,” the Republican Representative stated.

Divided policymakers hurdle bipartisan cryptocurrency policy
The contradicting stance of the policymakers is also clear from the way they wish to see the sector regulated. While Rep. Sherman is of the view that crypto should be regulated through the Securities and Exchange Commission (SEC) due to the agency’s expertise, Senators Kirsten Gillibrand and Cynthia Lummis introduced the first major bipartisan legislation for crypto assets in June to be treated as commodities under the CFTC.

Rep. Sherman also believes crypto is a ‘Ponzi’ scheme as he notes, “It is hard to be running the subcommittee dedicated to investor protection in a country in which people want to wager on [meme coins]. Cryptocurrency is a meme you invest in, in the hopes that you can sell it to somebody else before it tanks. That’s the nice thing about a Ponzi scheme.”

The subcommittee on economic and consumer policy of the US House Oversight Committee also demanded responses from regulators on how they would combat the many cryptocurrency scams that have plagued the industry.

Meanwhile, Congressman Sherman, who is also the Chairman of the House Financial Services Subcommittee on Investor Protection, is set to join the Crypto Policy Symposium 2022 on Sept. 5 and Sept. 6.

Shraddha Sharma

Shraddha is an India-based journalist who worked in business and financial news before diving into the crypto space. As an investment enthusiast, she has also has a keen interest in understanding crypto from a personal finance standpoint.