Opinion: The prevalence of crypto scams calls for regulatory measures in the industry.
By Brian Carss
A recent bill passed by the House of Representatives claims to regulate the cryptocurrency industry and protect consumers. However, the bill is actually a Trojan horse designed by an industry with substantial financial resources.
The Financial Innovation and Technology for the 21st Century Act is the cryptocurrency industry’s significant effort to gain favor from Washington. Essentially, it would exclude crypto assets and platforms from being classified as securities, significantly reducing the Securities and Exchange Commission’s regulatory powers over crypto.
Since the 1930s, the SEC has been crucial in safeguarding small investors following the stock market crash before the Great Depression. However, the crypto industry aims to shift regulation to the Commodity Futures Trading Commission, a less capable agency in law enforcement.
The potential consequences are serious. In 2023, the FBI reported over $4 billion lost due to investment scams. Recent studies have revealed that more than 90% of stablecoin transactions are fake, and the notion that crypto promotes financial inclusiveness is a misconception.
The crypto industry requires more oversight, not less. Unfortunately, the bill does not address this need. Lawmakers have been misled by crypto industry language and exaggerated promises of innovation to avoid effective oversight and legitimize risky practices.
Mark Hays, a senior policy analyst at Americans for Reform, warns that the bill poses a threat to financial regulatory safeguards for all Americans. He also cautions that it could set a dangerous precedent for industries like Wall Street to evade oversight.
The substantial external funding involved in passing this legislation highlights the industry’s influence in corrupting the legislative process. Crypto has spent a significant amount of money lobbying and influencing candidates to support their agenda in exchange for support.
Voters must urge Congress to resist falling for the crypto industry’s deceptive tactics and political pressures. Lawmakers must hold the industry accountable to the same standards as any other. Crypto investors should not receive less protection than others, as the industry’s track record indicates a significant risk in doing so.
Brian Carss is a communications intern at Americans for Financial Reform and a recent graduate of North Carolina State University.
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