News By  Kateryna Salnichenko
Newbie 1711 17 Nov 2022
Newbie

Congressman calls on the SEC to take decisive actions

Brad Sherman, Chairman of the House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets, released the statement regarding the FTX bankruptcy on his official website.

The congressman, a well-known cryptocurrency skeptic, has once again trumpeted the inherent risks of digital assets and the serious weaknesses of the industry in general. Sherman holds the same position as regulators and law enforcement agencies that are currently investigating FTX. 

The chairman of the Subcommittee on Investor Protection insists not only on bringing persons responsible for the platform bankruptcy to justice, but also on a detailed examination of the situation:

“It is crucial that we develop a clear understanding of the chain of events and management failures that led to this collapse.”

Brad Sherman has long been calling for strong crypto legislation. The politician has repeatedly advocated for Congress and regulators to take an aggressive approach in confronting the threats that he believes digital assets could pose. 

“I believe it is important now more than ever that the SEC take decisive action to put an end to the regulatory gray area in which the crypto industry has operated”, reads the statement.

Previously, Sherman called on SEC Enforcement Director Gurbir Grewal to take action against crypto exchanges that kept listing tokens that were officially declared by the Commission as securities.

However, abusing the Securities Act is not the only allegation against the crypto industry. Sherman also believes that key crypto players make their best efforts “to deter meaningful legislation by flooding Washington with millions of dollars in campaign contributions and lobbying spending have been effective.”

When talking about this category of donors, the politician was primarily referring to FTX founder Sam Bankman-Fried and co-CEO Ryan Salame. According to the nation's premier research and government transparency group OpenSecrets, SBF was among the top 10 largest investors in 2021-2022. 

Source: opensecrets.org

Source: opensecrets.org

Bankman-Fried spent more than $39 million on the campaign, including $36.79 million donated to Democrats. According to Sherman, that money was mostly distributed to the primary lines, rather than to help Democrats beat Republicans. Ryan Salame, on the other hand, donated $19.13 million to Republican representatives. 

“When you examine FTX efforts to influence Washington, you have to look at both CEOs, not just the eccentric guy wearing the shorts”, said the congressman.