After FTX, Crypto Companies No Longer Have ‘Benefit of the Doubt’ on Capitol Hill, Says Congressman
Lawmakers on Capitol Hill may now be more skeptical about crypto companies thanks to the collapse of the FTX exchange, U.S. Rep. Jim Himes (D-Conn.) told CoinDesk TV’s “First Mover.”
“Shields are up,” Himes said. “The players in the industry no longer have the benefit of the doubt.”
He said that prior to the "complete implosion" of FTX, "I'm not sure that my colleagues would have cast quite as skeptical an eye on companies" like FTX.
That lack of skepticism was especially true when it came to then-CEO Sam Bankman-Fried. Bankman-Fried donated upwards of $40 million to numerous political campaigns, including a $5.2 million donation to Joe Biden’s successful 2020 presidential campaign.
"There's no question that [lack of skepticism was] because he was known to be a donor," said Himes of Bankman-Fried. "There were members of Congress who wanted to meet him. He was invited to conferences ...
"Here's a very young individual who was interested in crypto but is also interested in things like inoculations and vaccines and seems to have about 190 [in] IQ, something that's not necessarily common inside the Beltway."
Plus, FTX “had become a household name” thanks to its Super Bowl ads and sports sponsorships, he said.
When companies such as Lightspeed and Temasek invest in a company like FTX, "there's sort of a presumption, and I think it's a dangerous presumption, that this is a real company ... instead of this sort of Ponzi scheme," Himes added.
What should the new Congress do next? Hymes said the primary focus should be on stablecoins.
With “tens of billions of dollars of stablecoins trading every day,” it may be the “best place” for lawmakers to implement a regulatory framework, he said.
“I think that can get done in Congress,” Himes said, noting that "we almost got it done in the last Congress." He would also like to see legislation mandating the registration of crypto exchanges.
One thing is for certain, according to Himes: The U.S. needs to “get its act together” and come up with “smart regulation.” He said the best-case scenario is for the U.S. to work "in harmony" with regulators in Europe and Asia on crypto the same way they do on traditional finance.