OPINION: This article may contain commentary which reflects the author's opinion.
Kevin O’Leary, one of the stars of “Shark Tank” and a paid spokesman for FTX, the cryptocurrency exchange that cratered this month, is defending cryptocurrency against some skeptical Democrats. During a Senate Banking Committee hearing Wednesday, he engaged in an argument with Massachusetts Democratic Sen. Elizabeth Warren over regulations to stop the use of cryptocurrency for money laundering.
“Mr. O’Leary, I know that you are a big supporter of crypto even after you lost $10 million in FTX’s collapse. But you are an experienced investor,” Warren said. “So, let me ask you, do you believe that the potential benefits of crypto are so promising that we should accept weaker anti-money laundering rules and weaker compliance from crypto firms than we require from banks, from brokers, and from Western Union?” the senator said.
In the hearing, O’Leary said that he did believe cryptocurrencies should be regulated but insisted that he does not believe they play a greater role in money laundering than traditional currency.
“No, I think we should apply the same regulatory structure that we apply to existing trading of stocks and bonds on exchanges tied to broker-dealers. That is not complicated. It’s already been implemented in other countries,” he said.
“And so, and I take issue, Senator, with your concept that it makes it easier to do money laundering. Currencies have been used for drug trafficking schemes since the ’60s and the American dollar when it was thrown out of a Piper aircraft in a duffel bag. The American dollar is also used by bad actors all the time,” he said before Sen. Warren cut him off.
“I appreciate your point that everyone tries to engage in money laundering,” the senator said. “That’s what terrorists do. That’s what drug companies, uh, drug dealers do. And that’s what states like Iran and North Korea have done.
“The only point I’m trying to make is, should the same rules against money laundering apply to crypto in the way that they apply to banks, to stockbrokers, to credit card companies, to Western Union? And, I think your answer to that is yes, right?” she said.
“No!” the investor shouted. “It’s not yes. I’m just saying if you know your client rules on both sides of the transaction and use a crypto, such as USDC, that is regulated, you solve this problem, Senator, overnight.”
O'Leary says the same regulations that are applied to the trading of stocks and bonds should be used.
He goes on, "I take issue with your concept it makes it easier to do money laundering. Currencies have been used for drug trafficking since the '60s."pic.twitter.com/3SVZs8sWzW
— Yahoo Finance (@YahooFinance) December 14, 2022
Fox News reported:
Warren said she appreciated O’Leary’s position that crypto should be regulated like stocks or bonds before advocating for her own bill to regulate digital assets. The Massachusetts Democrat has put forward bipartisan legislation with Sen. Roger Marshall, R-Kan., that would expand the Bank Secrecy Act to cover the cryptocurrency industry and apply know-your-customer rules to crypto participants such as wallet providers, miners, validators, and others.
The bill would also ban financial institutions from using or transacting with digital asset mixers and technologies that hide the origins of funds.
Further, the bill would instruct the Financial Crimes Enforcement Network (FinCEN) to finalize a proposed rule requiring institutions to report certain cryptocurrency transactions using unhosted wallets, which allow anonymous users to maintain a digital asset balance outside an exchange.
“Rogue nations, oligarchs, drug lords, and human traffickers are using digital assets to launder billions in stolen funds, evade sanctions and finance terrorism,” the senator said about her proposed legislation. “The crypto industry should follow common-sense rules like banks, brokers, and Western Union, and this legislation would ensure the same standards apply across similar financial transactions. The bipartisan bill will help close crypto money laundering loopholes and strengthen enforcement to better safeguard U.S. national security.”
Democrat Socialist New York Rep. Alexandria Ocasio-Cortez was furious after the arrest of Democrat megadonor, and FTX founder Sam Bankman-Fried.
The reason for her being disturbed was not the arrest itself, but the timing of the arrest.
“Bankman-Fried was set to testify before the House tomorrow. Tonight he was arrested. While I am disappointed we will not have the opportunity to present our line of questioning, we look forward to more information coming to light and justice being served in this case,” she said on Twitter.
Bankman-Fried was set to testify before the House tomorrow. Tonight he was arrested.
While I am disappointed we will not have the opportunity to present our line of questioning, we look forward to more information coming to light and justice being served in this case. https://t.co/HS9u1n5Kur
— Alexandria Ocasio-Cortez (@AOC) December 13, 2022
The former FTX CEO was charged with wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud, conspiracy to commit commodities fraud, conspiracy to defraud the Federal Election Commission and commit campaign finance violations and conspiracy to commit money laundering, the Department of Justice said.
