Today the Consumer Choice Center sent a letter (attached) to Senators and Representatives involved in crafting and approving future cryptocurrency regulations, warning them of the substance of regulatory recommendations made by FTX CEO Sam Bankman-Fried, which he made in a recent company blog post.
Bankman-Fried has, in recent years, become a primary player in American domestic politics, pledging to spend up to $1 billion to fund the Democratic Party’s 2024 efforts, and a notable figure promoting cryptocurrency regulatory policy — much of which would benefit his company and properties.
Yaël Ossowski, deputy director of the consumer advocacy group Consumer Choice Center, said “The reason for cautioning lawmakers is that the decentralization that powers the entire crypto ecosystem is at stake if they only hear from vested interests from oscillating agendas that won’t necessarily favor consumers.
“For those of us with a significant consumer interest in Bitcoin and other cryptocurrencies — protocols designed to be decentralized — to see so much capital and control vested in one person who has a major influence in crafting legislation to impact millions is a warning sign,” added Ossowski.
“Users of decentralized technologies do not need an industry approach to regulation. Regulations exist to set the rules of the game, not to chart the leaders of the game. The main caution we invoke is that many proposed regulations aim to cement existing industry players and lockout innovative upstarts, while at the same time requiring the same restrictive rules that caused many people to explore cryptocurrencies in the first place.
“Recent comments and suggestions by FTX CEO and noted Democratic Party fundraiser Sam Bankman-Fried, especially, leave us concerned. If rules on crypto and its customers help solidify the financial portfolios, positions, and stock prices of only a select few companies, this will drive innovation away from American shores. While many proposals laid out by Mr. Bankman-Fried do address consumer needs — especially as it relates to hacks, scams, and protection of funds — his recommendations for a highly licensed regime on all sides of digital transactions, especially Decentralized Finance (DeFi), go against the spirit of why cryptocurrencies were created in the first place,” he said.
“Last year, my colleagues and I at the Consumer Choice Center released our Principles for Smart Crypto Regulation, underscoring the need for preventing fraud, pursuing technological neutrality, reasonably low taxation, and legal certainty and transparency, which we believe will be a better framework for future regulation.
“It would benefit us all if future rules help empower consumers and the firms they interact with, punish fraud, abuse, and insider trading, and provide financial transparency. The whims of a select few industry players, however successful they may be, cannot be the guiding light for the future of decentralized digital money,” concluded Ossowski.