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At today's Senate Banking Committee hearing, Sen. John Kennedy (R-LA) had a shocking clash with Richard Painter, former Associate Counsel to the President and chief White House ethics lawyer.
Transcript
00:00Senator Kennedy.
00:02Thank you, Mr. Chairman.
00:06I've listened with great interest today,
00:10and here's what I hear you saying.
00:15The four folks to my left,
00:19I hear you saying that digital assets are different.
00:26Digital assets hold great promise.
00:30Digital assets need special rules.
00:35I agree with that.
00:39The obvious question is what should those rules be,
00:44and to what extent should we allow you to draft them?
00:50I've also heard some of you say that digital assets represent the next generation of the Internet.
00:58Well, we let the current generation of the Internet draft their own rules,
01:04and frankly, it looks like what we got as a result looks like somebody knocked over a urine sample.
01:11Congress can't even agree on basic legislation dealing with privacy on the Internet.
01:21How the hell are we going to tackle this?
01:22But I hear what you're saying.
01:27I hear Mr. Painter, as usual, if you follow him on social media, you know.
01:33All politicians are crooks.
01:35Very helpful.
01:36I want to direct most of my questions to Professor Massad.
01:45Is that how you say your name?
01:47Massad.
01:48Mr. Massad.
01:53I'm really worried we're going to get this wrong.
01:55Now, we don't know, we in Congress and our staffs don't know as much as the professionals in digital assets know.
02:12And I don't see how we can possibly catch up.
02:15Tell me more about your idea of having the SEC.
02:26Well, first, I don't want to run out of time here,
02:29but why is the digital assets industry so scared of being regulated by the SEC?
02:37Well, I think we need to step back, Senator.
02:40Briefly.
02:41Please.
02:42They don't want everything treated as a security because they don't want that entire framework to apply,
02:48but that's also because the SEC did fail to try to customize its rules to adapt for this technology,
02:56and it should do that.
02:57And you've got leadership at the agencies now who are working on those things.
03:03You're suggesting that we turn to two of our agencies, one of which is the SEC,
03:09and say you have expertise.
03:13Before we take a crack at a bill, you come up with a bill, with rules, with regulations.
03:21Tell us how to do this.
03:23Because I hear you saying in some cases digital assets are commodities.
03:27In some cases they're securities.
03:30Congress needs to fill the gap, which is, if it's not a security,
03:37who's going to create a regulatory framework for it?
03:40So you do need to fill that.
03:42But these questions about exactly when is it a security, when is it not a security,
03:47how do we customize the rules, what should we do about DeFi,
03:51a lot of that should really be left to the agencies.
03:54You could establish some principles, but I wouldn't write detailed rules.
03:58Have you looked, Professor, at Congressman Hill's legislation?
04:04I have in detail.
04:05What do you think?
04:06I think it's got a lot of problems.
04:07I think it's 236 pages of regulatory arbitrage opportunities for creative lawyers,
04:13and I used to be one that did that kind of stuff.
04:16Made a lot of money, did you?
04:17I did, but...
04:18Mr. Painter, do you think Senator Gillibrand is a crook?
04:25No, and I do not think all politicians are crooks.
04:29And why did you call her a crook?
04:30I did not call her a crook.
04:32Now, Senator, you need to focus on this bill.
04:36You're doing this again.
04:37You did it at the last hearing.
04:39You need to read the bill.
04:41Senator Gillibrand's role in stable corn regulation,
04:44$217,000 in crypto donations.
04:49You tweeted that.
04:50Yes, I do.
04:51And then you said,
04:52the crypto industry is buying Congress and the White House.
04:56This won't end well.
04:58Why do you think the crypto industry is buying Senator Gillibrand?
05:03I said, look at the campaign contributions from this industry.
05:07You think they've bought her?
05:08I said, look at the campaign contributions.
05:10You said they bought her.
05:11Do you think they bought her?
05:12Senator, you need to focus on this bill instead of trying to distort my Twitter.
05:15Last time, you were quoting what a Marxist in Chicago said about me.
05:20And what evidence do you have to keep a crook?
05:23I said, there is massive amount of campaign contributions coming into this Congress
05:28from the crypto industry.
05:29Do you want to apologize to Senator Gillibrand?
05:32I do not want you to have to apologize for passing legislation that destroys our economy.
05:38You are distorting what I said, just like you did in the last hearing.
05:42You're wasting everybody's time, Senator.
05:45You're a whack job.
05:46Senator, you are a major league.
05:48I think we are.
05:49Next level whack job.
05:52Is this middle school, Senator?
05:54Senators and witness, thank you both.
05:56I think you should apologize, Senator.
05:58I think, Senator, you're wasting our time.
06:00This is not middle school.
06:01Thank you for your participation.

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