During a Senate Banking Committee hearing on Wednesday, Sen. Elizabeth Warren (D-MA) asked witnesses about current and proposed regulations for cryptocurrency.
00:00Thank you, Senator Haggerty. On behalf of the chairman, I now recognize myself.
00:06We need to make sure that any new legislation to regulate crypto market doesn't do more harm than good.
00:13And there are a couple of areas where I think we need to be very careful not to make things worse.
00:19First, we cannot pass any legislation that eats away at the SEC's current jurisdiction to regulate traditional securities.
00:27Now, Mr. Massett, you were chair of the CFTC and you were assistant secretary for Treasury for Financial Stability.
00:36Could market structure legislation make it possible to structure a non-crypto product so that it dodges our security laws?
00:48Use something like Tesla stock as an example.
00:52Yes, it certainly could.
00:54If you, for example, provide an exemption for activity on decentralized trading protocols, and that's a very broad exemption,
01:04then you could tokenize Tesla stock and have it traded on that protocol.
01:11And it could be exempt then from 34-act trading requirements, at least.
01:16So, in effect, we start to repeal the SEC, as we've had it for traditional stock.
01:21It could certainly undermine their authority substantially.
01:24It's critical that any crypto regulation bill we pass does not have massive unintended consequences.
01:31And I think those are unintended consequences for everyone.
01:33But consequences that would reach far beyond the crypto market and take a tire iron to the $120 trillion golden egg that is America's capital market.
01:46So, I think it's an important note we have to do in regulation here.
01:51There's another problem that we've got to face, and that's corruption.
01:55President Trump has made it impossible to have a conversation about crypto legislation that does not address his most successful grift.
02:04According to a recent New York Times analysis of the president's financial disclosure, crypto is now the biggest source of President Trump's wealth.
02:13In the past seven months, he has become the most successful president in history at making money off his time in the Oval Office, and he's done it using crypto.
02:24Now, Mr. Painter, if Congress passes a bill creating a new federal regulatory framework for the crypto market, what will happen to the crypto market?
02:34Is it likely to grow?
02:36It will grow substantially.
02:38Okay.
02:39And what will that do to the value of President Trump's meme coin?
02:43It will make him very rich, even richer than he already is.
02:46And what about the value of his stable coin and his son's Bitcoin mining operation and his family's crypto holdings and on and on?
02:56The Trump family will become very, very wealthy as the prices go up and up and the bubble rises.
03:02So if we create a new federal regulatory framework for the crypto market, the president and his family stand to make a whole lot more money.
03:12So, Mr. Painter, if the president and his family own billions of dollars in crypto, if Congress passes a crypto bill, who will claim the power to appoint and the power to fire the regulators that will implement whatever new rules are put in place governing crypto holdings?
03:36The president of the United States, and he is now also claiming the power to fire the members of independent commissions, and that will include the Commodities Futures Trading Commission and the SEC.
03:45Okay.
03:46So you were President Bush's chief ethics counsel.
03:50Can you think of another time in American history when a president of the United States held such power over regulators, the very regulators, who would determine the value of the president's own net worth?
04:08Never.
04:09We have never had, since the Civil War, a president of the United States with substantial financial holdings that are conflicted with any official duties.
04:19And this is unheard of.
04:22And now it's not just real estate.
04:24But Donald Trump recently is into crypto, even though he said that it was a scam just a few years ago.
04:30He's now into crypto and into social media industries he did not have in his first administration.
04:34Well, we need clear and strong rules for the crypto market, but the proposals I've seen so far undercut the investor protections in our traditional capital markets.
04:46They harm our national security, and they supercharge the value of President Trump's crypto grift.
04:54We need crypto regulations that actually regulate the industry.
04:58We don't need another giveaway to a handful of billionaire insiders.
05:02And with that, I conclude and not only call on Senator Britt, but hand the gavel to you.
