California Representative Brad Sherman, who repeatedly called for a ban on U.S. residents buying crypto, accused leaders at several financial agencies of parroting former FTX CEO Sam Bankman-Fried’s ideas on regulating digital assets.
In a Nov. 16 hearing before the House Financial Services Committee, Sherman directed his remarks to Federal Reserve vice chair of supervision Michael Barr, Federal Deposit Insurance Corporation acting chair Martin Gruenberg, National Credit Union Administration chair Todd Harper, and acting Comptroller of the Currency Michael Hsu. The U.S. lawmaker suggested the four regulatory heads had done little to address “crypto billionaire bros” using digital assets for the evasion of sanctions and taxes who merely “want the appearance of regulation” rather than clearly defined rules.
“The crypto billionaire bros are determined to get a light regulator,” said Sherman. “I’m distressed by what I’ve heard from you, gentlemen: guardrails, safe and sound ways to deal with crypto…. you sound like Sam Bankman-Fried, only you’re wearing long pants instead of shorts. What vague pablum.”
According to Barr, the collapse of FTX had “some impact” on the banking sector, calling for Congress to step in and provide regulatory clarity. Sherman pointed to the Basel Committee on Banking Supervision proposing “tough, real standards” for banks to handle crypto assets. Barr, Gruenberg, Harper, and Hsu said they would support regulations of comparable strength in the United States.
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The California Representative addressed the same committee during a December 2021 hearing on U.S. financial innovation at which Bankman-Fried was testifying. Sherman warned that crypto firm CEOs “with their lobbyists, their PACs, and their power” threatened regulators’ ability to protect consumers.
Members of the House Financial Services Committee will hold a hearing in December aimed at exploring the collapse of FTX and “broader consequences for the digital asset ecosystem.”