U.S. Congressman Brad Sherman: ‘Crypto Is a Garden of Snakes’

On Tuesday (14 December 2022), U.S. Congressman Brad Sherman (D-CA) shared his thoughts on the crypto space in the wake of the collapse of FTX and the arrest of its disgraced founder and former CEO Sam Bankerman-Fried (aka “SBF”).

Congressman Sherman, who was “born and raised in southern California” is “currently serving his thirteenth term in Congress and has served in the House of Representatives since 1997.” He is “a senior member of the House Foreign Affairs Committee, a senior member of the House Financial Services Committee, and a member of the House Science, Space and Technology Committee.”

In 2019, Sherman was “elected to serve as Chairman of the House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets.” He has a law degree from Harvard University, where he graduated Magna Cum Laude.

On 9 May 2019, Congressman Sherman called for a complete ban (in the U.S.) on cryptocurrency:

On 13 May 2019, during an interview with CoinDesk at Consensus 2019, former Congressman and presidential candidate Ron Paul called Sherman “just another thug in Washington” and went on to say:

They happen to believe they know what is best and they will run the show. They want to be the boss, they’re dictators, and he’s not unusual… He’s very typical in all degrees in all issues, whether it’s a social issue, like a few years ago when they decided the worst thing in the world is smoking marijuana.

On 19 July 2022, Sherman was hating on crypto again. At a hearing (titled “Oversight of the SEC’s Division of Enforcement”) before the U.S. House of Representatives Committee on Financial Services, he asked Gurbir S. Grewal, Director of the Division of Enforcement at the SEC:

You’ve gone after XRP because XRP is a security, but you haven’t gone after all the major crypto exchanges that process tens of thousands if not far more transactions. If XRP is a security and you think it is and I think it is, why are these crypto exchanges not in violation of law?

And is it enough that the crypto exchange have said, ‘well, having committed tens of thousands of violations in the past, we promise not to do any more in the future’. Is that enough to get you off the hook for enforcement?

Sherman later went on to criticize the SEC for not going after the major exchanges (such as Coinbase) that allowed trading of XRP in the U.S. before 22 December 2020, which is when the SEC announced that it had “filed an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.” 

Sherman told Grewal:

It is easier to go after the small fish than the big fish, but the big fish operating the major exchanges did many, many tens of thousands of transactions with XRP. You know it’s a security — that means they were illegally operating a securities exchange. They know it’s illegal because they stopped doing it, even though it was profitable… I hope you focus on that.

https://youtube.com/watch?v=-PaNVenH2T4%3Ffeature%3Doembed

According to a report published by Los Angeles Times on 4 September 2022, Sherman told The Times:

I don’t think we’re going to get [to a ban] anytime soon… 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.

He also called crypto a Ponzi scheme:

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.

Well, yesterday, an FTX hearing in front of the House Financial Services Committee, Congress Sherman found himself with an excellent opportunity to slam the entire crypto space, and he took advantage of it.

Sherman said:

I’m the only member of the House to get an “F” from the only crypto promoting organization that rates members of Congress. My fear is that we’ll abuse Sam Bankman-Fried as just one big snake in a crypto Garden of Eden. The fact is 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 somebody else to buy.

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, sanctions evaders who will find that to be 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.

https://youtube.com/watch?v=9sR6QSvF7n8%3Ffeature%3Doembed

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