According to CoinDesk, recent opinions from Bloomberg and Better Markets criticize the crypto industry's political contributions, suggesting these donations aim to garner support for digital assets. As a former Democratic Commissioner at the CFTC and current regulatory compliance professional, I find these statements unfair to emerging crypto companies and the millions of Americans investing in these products.
Vice President Kamala Harris has not engaged in actions that could be seen as pandering to the crypto industry. Instead, her team has been listening, engaging, and learning about this new financial product, which is a responsible approach. Despite over a decade of cryptocurrency trading, it is unlikely that the industry will disappear, making it essential to regulate these products properly. Contrary to some opinions, crypto faces numerous state and federal regulations. An enforcement-only regulatory approach could drive jobs overseas, stifle innovation, and leave crucial decisions to the courts.
CFTC Chairman Rostin Benham has actively encouraged Congress to pass sensible and protective legislation. Claims by Better Markets that the CFTC is incapable of this and susceptible to regulatory capture are unfounded. In 2023, the CFTC recorded a significant number of enforcement actions in the crypto space, representing nearly half of all enforcement actions. However, crypto-related fraud constitutes only 1% of the annual $3.2 trillion in illegal activity involving traditional fiat currencies like the U.S. dollar. Thus, crypto is not the primary financial product for financial predators.
While the crypto industry has seen speculation and abuses, these issues are not unique to digital assets. Historical events like the Gold Rush of 1849 also experienced similar problems, yet gold is now considered a safe investment. The SEC has facilitated American investments in bitcoin and ether through Exchange Traded Funds (ETFs). Recently, the SEC approved an ETF allowing retail investors to make leveraged bets, which can be risky.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.
