Regulation
Crypto scams are rampant. The industry needs regulation. – Newton Daily News
From Brian Cars
A recent bill passed by the House of Representatives purports to regulate the cryptocurrency industry and protect consumers. But the bill is a Trojan horse created by a cash-rich industry, the real one.
THE Financial Innovation and Technology for the 21st Century Act It’s the cryptocurrency industry’s grand attempt to gain favor with Washington. Simply put, it would exempt crypto assets and platforms from the definition of “securities,” meaning the Securities and Exchange Commission’s power to regulate cryptocurrencies would be dramatically reduced.
The SEC has been the cornerstone of small investor protection since the 1930s, when it was created in response to the pre-Depression stock market crash. Instead, cryptocurrencies want to be regulated by the Commodity Futures Trading Commission, a shadowy agency with far less ability to enforce the law.
The potential impact should not be taken lightly. THE The FBI reported it in 2023, over $4 billion was lost to investment scams. Another recent report showed that over 90% of stablecoin transactions are impostor. And the myth that cryptocurrencies are a means to financial inclusion is exactly that.
If there is one industry that has ever needed more oversight, not less, it is cryptocurrencies. But that’s not what the bill would do.
The cryptocurrency industry has consistently misled lawmakers in the process by using obscure industry jargon and exaggerated promises of “innovation” to craft policies that are simply new ways to avoid effective oversight and legitimize risky industry practices.
“This bill, if adopted, would close the supposed cryptocurrency regulatory gap with a wrecking ball rather than a modest patch, harming financial regulatory safeguards for all Americans, not just cryptocurrency consumers,” said Mark Hays , senior policy analyst at Americans for Reform. Hays even fears the bill would also create a roadmap for other industries, namely Wall Street, to evade regulatory scrutiny.
The outside money involved in passing this legislation highlights the ability of a wealthy industry to corrupt the process. Cryptocurrencies have spent an incredibly large amount of money lobbying AND pushing candidates embrace their political goals in exchange for support. Crypto Super PACs have spent over $100 million this cycle.
Lawmakers will no longer have consumers’ interests at heart if they become captives of the cryptocurrency industry. But in the recent cryptocurrency vote, 71 Democrats, who are generally more skeptical than their Republican counterparts, joined Republicans to help this bill pass the House. This proves the give power to the lobby has the upper hand over lawmakers despite opposition from consumer and labor groups, state regulators, several federal agencies and the Biden administration.
Voters will need to demand that Congress resist the temptation to give in to false industry claims, flashy public relations and political pressure. Lawmakers should hold the industry to the same standards as everyone else. Why should cryptocurrency investors receive less protection than others? Industry data shows that this risk is not worth taking.
Brian Carss is a communications intern at Americans for Financial Reform and a recent graduate of North Carolina State University.