Senate Banking Committee Chair Sen. Sherrod Brown has taken on all manner of powerful lobbies and industries over the courts of his career. Now, it seems like he picked his final fight with an effort to enact oversight on cryptocurrency companies. These in turn poured $40 million into the campaign of his GOP opponent Bernie Moreno, who defeated Brown this week.
The industry has been very active and bipartisan in its efforts to stay unregulated, backing candidates from both parties, as next door, in Michigan, crypto interests helped fund successful Democrat Elissa Slotkin running for an open Senate seat.
And most infamously, the convicted FTX mastermind Sam Bankman-Fried, now sitting in a Brooklyn federal jail, was a major public donor to Democrats while also secretly funneling money to the GOP.
We are not picking on crypto because we have some innate opposition to the technology itself; we are pointing out that it has about as terrible of a track record as is possible for a consumer product (really an unregulated speculative security) that is still relatively new.
Billions of dollars have been wiped out in successive crypto collapses, most infamously the FTX debacle that resulted in Bankman-Fried — once the globally-recognized chief evangelist of the concept — going to prison after siphoning off consumer funds.
Thus far, the industry has failed to prove that it can be trusted to operate transparently or in ways that advance consumer interests. Many coins and exchanges claim that their products are either effectively currency — despite the fact that very few are ever actually utilized for transactions — or something like stocks with some innate backing, despite the fact that there are by and large no assets behind them.
If consumers want to take a risk, they’re free to do so. But they should do so with clear eyes and in at least a somewhat regulated industry.
Large firms have spent months here in New York jockeying for one of a handful of coveted licenses to open up a casino, but practically anyone with some technical know-how and server space can set up a cryptocurrency and start selling it to consumers on the spot, with little in the way of oversight structures.
There might be ways that the industry could operate responsibly, but so far it has not been a good idea to let the industry try (and fail) to police itself. Now, some of the voices that had most strongly advocated for additional regulation, like Brown, are out of the picture.
More broadly, a new incoming Trump administration promises a scale-back of regulatory authority and activity, at least in most regards, with functions like immigration enforcement a notable exception. What this means is that, if you think scams and frauds and white collar crime are bad now, who knows what happens when the regs are reduced.
A presidency committed to the dissolution of an administrative state is not going to do much about the avalanches of spam calls and direct messages and AI-generated swill that now plagues most Americans’ online and offline lives.
There’s a lot of money to be made from this relentless scamming. All of the money spent on elections is more like an investment to make sure the gravy train keeps running, to the detriment of the public.
