Congressman Brad Sherman Takes Aim at ‘Billionaire Crypto Bros’ for Slowing Regulation

U.S. Congressman Brad Sherman has hit out at the crypto industry in the wake of the FTX collapse, pointing the finger at “billionaire crypto bros” for attempting to delay “meaningful legislation” from the Federal government. 

The crypto ultra-rich were represented well among political donors in the recent U.S. midterms. 

Around $2.3 billion was raised overall during this election cycle, as per data from the non-profit Open Secrets. FTX CEO Sam Bankman-Fried spent $39.8 million, most of which flowed to Democrats, making him the 6th-largest individual political donor.

Noted crypto bull and Silicon Valley celebrity Peter Thiel spent $32.6 million to support various Republican candidates. 

Sherman, who currently serves as Chairman of the Subcommittee on Investor Protection and Capital Markets, said the recent collapse of FTX was a “dramatic demonstration of both the inherent risks of digital assets and the critical weaknesses in the industry that has grown up around them” and that he wholeheartedly supports efforts to “make sure those responsible are held accountable.”

In particular, the regulator acknowledged political donations to Democrats by FTX CEO Sam Bankman-Fried, which have already received adequate media attention, commenting that these donations were given “not to help Democrats beat Republicans” and “mostly unsuccessfully.”

Sherman added that the donations of Ryan Salame, co-CEO of Bahamas-based FTX Digital Markets, also deserve attention, saying: “When you examine FTX efforts to influence Washington, you have to look at both CEOs, not just the eccentric guy wearing the shorts.”

Salame donated over $23 million to Republican candidates and campaign groups in 2022, which placed him 14th on the Open Secrets donor list, demonstrating that FTX-linked donations were not divided equally along party lines.

Sherman tackles crypto

This isn’t the first time Sherman has taken a hard line on cryptocurrency exchanges. 

In his latest memo, the congressman referenced when he called SEC Division of Enforcement Director Gurbir Grewal to pursue enforcement actions against crypto exchanges “for failing to register with the SEC after listing tokens on their platforms that the Commission had publicly identified as unregistered securities.”

The senator, who once said that all Bitcoin does is allow “a few dozen men in my district to sit in their pajamas on their couch all day and tell their wives they are going to be millionaires,”  has drawn public criticism for some of his more daring statements about digital assets.

In a Congressional Hearing earlier this year, Sherman asked whether “those of color will be left holding the bag if we see a collapse in cryptocurrency or stablecoins?”

The statement stirred ire on crypto Twitter, with African American Democratic primary challenger Aarika Rhodes, who is generally pro-crypto, deriding him for his “patronizing attitude.”