Adam Schiff Accuses Trump Of 'Conflicts Of Interest' Stemming From His Cryptocurrency

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During a Senate Agriculture Committee hearing in July, Sen. Adam Schiff (D-CA) claimed the President had multiple "conflicts of interest" stemming from his cryptocurrency, $TRUMP.

Transcript

00:00Thank you, Mr. Chairman, and thank you all for being here to testify.

00:04I think it's very important that we have good, strong, and sound regulation of this whole industry

00:10to protect consumers, to make sure that there are clear and understandable rules of the road,

00:17that there's some certainty for investors, for consumers, that there are protections in case of

00:22bankruptcy or fraud. I'm also deeply concerned, as Senator Bennett just alluded to, to the prospect of

00:32high administration officials manipulating digital currencies or their ability to influence

00:38enforcement actions, and being very interested in your thoughts about how to address these conflicts,

00:44potential and real conflicts of interest, when you have people who are in positions of dominant

00:50influence like the president or others issuing, endorsing, sponsoring their own digital currencies,

00:58how we can ensure that we either prohibit such actions completely, or that we make sure that

01:05people who are engaging them are subject to laws against market manipulation and self-dealing.

01:11So let me start, if I can, Mr. Benham, good to see you again. By asking you, I know you've spoken

01:17directly about the need to maintain public confidence and integrity in these markets.

01:24Do you think public officials that have any kind of supervisory or influential role

01:28should be permitted to issue their own currencies or endorse their own currencies, or would it be the

01:36most basic and fundamental provision that that should simply be banned? Senator, thanks for the

01:43question. Short answer is yes, it should be banned. And I'll say as a former regulator, you know, just

01:48five or six months removed. For seven years at the commission, I took that responsibility very

01:54seriously. The weight of the responsibility as a regulator over markets and ensuring there was no

01:59conflict of interest or exposure that me or my family had to the markets I regulated.

02:05And does anyone testifying here today think it's okay, good practice, nothing to see here for high

02:15administration officials who have influence over these markets to be able to issue or promote their

02:20own personal stable coins, digital currencies of any kind? Just to be clear, Senator, I agree that it

02:27should be banned, should be prohibited. And I would go further than the administration officials. I would

02:33say ban all those actions from any members of the House or Senate. Anyone disagree with that proposition?

02:43Senator, I know this has been a discussion among policymakers. I just wanted to note that for

02:47myself, this is admittedly outside my area of expertise, and I see this as a decision for Congress. I just

02:52wanted to say that respectfully, Senator. Well, I appreciate that, and I hope we will make that very

02:58decision because I think it's vitally important that we regulate this area. I think the current

03:04unregulated or regulation by litigation posture we're in is undesirable for everyone. Doesn't protect

03:13consumers, doesn't help legitimate actors in the industry, doesn't provide any certainty or ability to

03:21to plan or predict or invest. At the same time,

03:26the most basic protections we might put in place

03:31to protect consumers will be undermined if those that can influence the whole market

03:37are in business themselves and able to enrich themselves. But let me move on from the problems

03:44that have been documented by the first family's involvement in this business.

03:48In what other respects, and I open this up to any of our participants, can we help ensure that

03:56consumers are protected? Obviously, there have been some catastrophic failures of companies in this

04:02space engaged in fraud. What's the best way to protect consumers so that in the event of a

04:09catastrophic failure, they're protected?

04:11Maybe I'll start off, but I think the first is acting. I think the Congress needs to act to fill this

04:19regulatory gap. This committee is starting that process of doing that. And we're going to have to,

04:25as was mentioned, make sure that we have strong, clear lines between the CFTC and SEC on how you

04:31think the jurisdiction should go. But importantly, each agency brings unique customer protections and

04:38and important market integrity issues that are going to help fix the problems that you're identifying.

04:45So I think you're preaching to the choir here. Everybody on this panel wants to fill this gap

04:50right now. And it's up to Congress to act quickly. Senator, I'll add, in December 22,

04:57I testified before this committee shortly after FTX failed. And FTX had one entity that was registered

05:03with the CFTC. It had a number of entities globally, over 125. And I said to this committee,

05:09of the 125 plus entities, about two or three, two I think in Asia and one here in the U.S.,

05:16Ledger X, which was registered and regulated by the CFTC, was viable, well managed, and had value after

05:25that bankruptcy. So after that fantastic bankruptcy, this entity that had regulation, that had supervision,

05:31that had oversight, had a future because of regulation. And that's the point that I think

05:37is most important for this committee to take away. As much as there are many issues to resolve and

05:41discuss and deliberate, regulation works, and it ultimately will protect customers.

05:47I would agree with what former Chair Benham said. And I think the other entity of the FTX family was one

05:53in Japan that was also subject to pretty good regulation.

05:56If I may, very briefly, Senator. I agree with the need to address the regulatory gap,

06:00as I mentioned, by providing the CFTC with comprehensive oversight over digital commodities.

06:05It's just taking us on a slightly different angle. I know for CCI, a lot of what we do is consumer

06:09education, Senator. So we would love to be a resource to you and your office. We have different

06:14workshops on making sure that there's scam awareness campaigns. A lot of our members do that as well,

06:19because even though we're here to talk about the need for market structure, there is a need to just

06:23educate a lot of consumers about the fraud and scam out there. And CCI is committed to coming up with

06:27policy solutions, Senator. Last to keep it short, Senator, and thank you for the question.

06:33I agree with all my panelists. Look, this isn't difficult. There are long-standing safeguards in

06:40place to protect retail customers. The CFTC and NFA have adopted them over the years with regard to

06:48derivatives. Those should be applied also to the digital commodity markets to protect retail customers,

06:54safeguarding customer funds, market practice rules, business conduct rules, disclosures.

07:01There's a whole litany of them, and I think that it's extremely important that this committee look

07:06to those time-tested requirements and safeguards, and they go a long way to accomplishing

07:14what we're trying to do, and that's protect retail customers with regard to digital commodities.

07:19Thank you. Thank you, Chairman.

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