Kevin O’Leary, a cryptocurrency investor and FTX paid spokesman, testified before the Senate Banking Committee on Wednesday, defending digital currency against skeptical senators and engaging in a heated confrontation with Massachusetts Democratic Senator Elizabeth Warren over her proposed regulations.
Warren’s proposed laws, according to O’Leary, will hinder innovation in the business and make it more difficult for entrepreneurs to develop and launch new projects. He feels that light-touch regulation, rather than heavy-handed prohibitions, would benefit the sector the most.
“My position is that we should have a much more open and flexible approach to cryptocurrency and digital assets,” O’Leary said. “I believe that regulation should be light-touch and should be tailored to the unique nature of the industry, rather than imposing blanket restrictions that would stifle innovation and hamper entrepreneurs.”
The furious argument between O’Leary and Warren contrasts sharply with the more cautious stance taken by many members of Congress. Instead of attempting to put severe controls on the business, O’Leary advocated that the government should concentrate on fostering innovation and establishing a level playing field for entrepreneurs. However, Democrats, Like Warren, want to regulate the market completely citing the potential 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?”
“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,” O’Leary told Warren.
“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 wanted to continue, but Warren cut him off.
“I appreciate your point that everyone tries to engage in money laundering,” she said. “That’s what terrorists do. That’s what drug company, 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 asked.
“No!” O’Leary exclaimed. “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.”
The world is changing and how businesses are built and survive is also changing. O’Leary is right, in my opinion, that the government should be diligent in watching out for fraud cases but they shouldn’t stand in the way of progress. Especially when what the US needs right now is growth.