Ron Hammond Interview - Congressional FTX Hearings Incoming, Crypto & Stablecoin Regulations, & SBF Jail - Transcripts

November 22, 2022

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Ron Hammond of the Blockchain Associations talks the FTX debacle, upcoming congressional hearings on FTX, Sam Bankman-Fried, stablecoin and crypto regulations, SEC Gary Gensler, and Republicans taking the house. 🌟Sponsor - Signup with Uphold....

Transcript

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thanks for having it really appreciate it

Ron you're demanded twelve too because this F. T. acts diabolical collapse whatever you wanna call it there's a lot of implications a lot of ripple effects here and in the political circles you got a lot of connections campaign donations and a lot of folks are trying to figure out what's happening tell us what's the latest that you're hearing

yeah definitely so I think it's first highlight that the blocks SO station never had F. T. X. our membership we actually we're going to get some of the couple lobbying efforts most notably on the DC CPA which you have to go into more detail afterwards but yeah definitely a yes yes situation as I don't wa ripple effects in DC they were in a lot of trade associations are in a lot of other groups and they're also actually on Capitol Hill as of yet personally actually lobbying for legislation introduce themselves to members of Congress and staff and I can easily save this for sure that he was the most active CEO in DC in crypto prime financial services as well I mean it was very common for me to run into him on Capitol Hill lobby your members of Congress or staff or even just having a briefing for educational purposes so he was really trying to be the face of crypto in DC and so this was a really big backlash in DC not just on top of fraud or likely fraud that occurred at F. T. acts but also is how personable and called garland folks were from S. yeah many folks in DC I didn't think he was in the ferries person or is committing fraud obviously now we know that has been the case but a lot of people feel burned here on both sides the Iowa Republican and Democrat im genes important note lease on the donation side that both Republicans and Democrats got money from SPF so the the links and conspiracy theories in terms of the buy ministration or the Kerry cancer thank you at least in my personal opinion have not seen that play out you know the campaign donations or organs our variety fronts are still taking conversations but by no means at least in my experience I see that Hey this having a more deeper connection so you know we'll see how this all plays out this me a lot of hearings on this topic as you mentioned but is gonna carry over to twenty twenty three I think folks in Congress right now just ask themselves what happened and will begin to the bomb out to open next couple weeks looks like

an M. sure both sides of the aisle many folks are upset because to your point sandbag me free was there taking photos with these folks hugging them and it's like he was doing all this nonsense behind the scenes which nobody news I'm sure there are a lot of them are upset

naturally so yes I mean you got a call almost a year ago he testified from the house financial service committee in those kind of his first foray into Capitol Hill and how to interact with Capitol Hill you know there's a lot of folks who said he's very different from like the Jeremy Allaire is the prime Brooks's now Dixons are also testifying at that hearing you know he's a little more of a character yes is approach at least with him or demeanor still a lot of folks that was not computational he's a very big of a tech nerd of sorts so how could someone this smart or smart done all this fraud or potentially did all this fraud and that's where a lot of folks are more scratching their head saying we really misjudged appear in DC I think it's something more of a reiteration that a lot of folks weren't trusting of our we're trusting of him and his message to DC and now they are very skeptical not only of FTX obviously but of the crypto industry as a whole because a lot of folks said this man was the face and it is protecting failed fortunately

while to run how do you think the industry comes back from that is it more

you know this is a

part of it's gonna take time but maybe more credible faces in DC your Jeremy Allaire is your your Brian Armstrong and so forth

definitely I mean I think there's also the idea that you know no one is the savior of crypto in DC and this is really big question and I've been seeing this back since twenty seventeen when I worked on Capitol Hill isn't there always seems to be you know one or two people they always say you have all failed I'm here dogs to lobby for a for DC I'm here to pass legislation I'm here to move the needle when actually I think the ethos of the crypto ecosystem is we're all in this together you know what you're part of a certain trade association not when you parse certain company or not at the end the day crypto rice's together we fall together in this case we're all falling together whether we are connected to F. T. X. or not in DC because of just those actions because he has lost the trust of folks in DC invokes London F. T. acts with the rest of the crypto ecosystem and that hasn't unfortunate ripple effects no pun intended so that's been really unfortunate C. and now he's in the box has a station we're trying to repair that and try to have a just a matter of fact conversation I know a lot of folks a coin base in other groups are also doing the same thing but we have a long way to go and I think the important thing we're trying to tell folks on Capitol Hill as if there was fraud and get it looks like there was a lot of fraud here we have laws on the books that now how is that playing the fact with him being domiciled the Bahamas has it come to affected those who may have known situation who likely weren't base United States is a lot of questions that still need to be asked yeah I think we're gonna get to the bottom out hopefully the next couple weeks but a lot of folks are already quickly blaming the regulators and I think they're also scratching their head saying what was our jurisdiction here do we have jurisdiction here but a lot of folks in Congress saying I wanna hear from F. T. acts that we hear from regulators they don't want to hear from anyone else in the crypto ecosystem that's totally fine that's good and that's I think we're gonna like we see in the next couple rounds of hearings in December but the in the Davis getting still continue for twenty twenty three going for it my hope is at least a good spawns a a conversation saying you know what's next what can Congress do to make sure that this doesn't happen again and find some good bipartisan legislation because with the split Congress next year we're gonna have to work together from both sides the aisle to find a good comprehensive regulatory framework otherwise there is to be hosting hearings for you know next two years with nothing in Endocyte so I hope we do finally have some spurred action from Congress on this movement

so there is a hearing that is scheduled in December that I know what one I know of Maxine waters and Patrick Henry bipartisan support we we think we can expect from that you know will they try to bring Sam back me freedom or representatives of F. T. acts

that's probably the case a lot of folks I've been talking to on both committees and say look we want to talk to the source here we want to talk to the folks who were at the epicenter of this because it looks like it was just like a small cohort of folks in FCS Alameda who knew what was going on so questions a who knew what was going on and be clean bring the men to testify in front of us now they have subpoena power at some these committees but will be in hard to get someone like SPF to testify in front of Congress in person definitely is a virtual we'll see but I think if they aren't able to get those folks in the main cohort of who knew things and then I'm going to lose easy in that group as well probably looks the regulators and then after that they got a private industry groups or industry companies who are also involved in consumer protection groups what have you so I know we saw another hearing notice actually about an hour ago from the Senate agriculture committee and that's important because the Senate agriculture committee was going to move forward actually on the bill that ask you have you have to be extra heavily lobbying for the digital consumer there to deduct money consumer protection act the TCPA I mentioned earlier and so if you really care C. for he committee that's been so lined with F. T. acts in this legislation and have a hearing with this head of the C. F. T. C. are you gonna try to move this bill in the last couple waning days of the Congress or they can say it probably is which project a step back here and say why was that the explosion with this bill what was wrong with it and what we do going forward say making sure that this is actually seen as a legitimate piece of legislation in the eyes of public and the regulators not just an F. T. X. wishlist which Kelly that's kind of what became towards the end as we saw huge refer to defy ecosystem verses that TX lobby approach

there's just so many things happening and and as a result of this situation the next thing I want to ask you what is the Republicans won the house back a lot of them are in the committee that oversees the SEC and a lot of folks are saying Gary denser failed here because he met with the folks at F. T. X. even though F. tex dot com was based in the Bahamas there was an arm in the U. S. F. T. X. U. S. so folks are saying dude Kim Kardashian will what happened would have T.

X. what happened with Celsius so what are you hearing here now how may the folks the committee you know go after Gary cancer here

yeah so what we had the blotches sociais Asians first annual policy summit last week actually last Wednesday and in time incumbent anymore perfect because we had a lot of policy makers in front of a a real forest briefly just walking through their thoughts initially what was happening in real time and Tom emmer who currently oversees the oversight committee on the Republican side for financial services he was very much his main said look I wanna bring your cancer and I've been having requested have been a lot of other Republicans and saying the same thing but one have carry guns around if we don't have a man when the Democrats have house we will bring him in several times and I think the word he used was you bring it caught because he's going to be staying here a long time on the house side both in the uplands service committee oversight committee and many other committees potentially in the Senate to so I can definitely see get denser and yes you see being front and center of this especially from a Republican angle let's not forget the Democrats are saying the same thing too Jim Himes as well she cautions loss for the Democrats signed five services said we need to have yes you come in we need to have a hearing find out what happened where is our jurisdiction and was there a point where they failed or they've been axed so I think it's good to have these questions asked it's good that they're bipartisan I wonder in the hope is that this is in turn sweet super parson issue as a reference earlier there is issues with a lot of folks specially when the the majority party of the ruling party for the administration is one party in the house is a different party intends to be in this goal to try to find me and

what

a narrative winning points on the calm side so most notably thing about Benghazi January six as well as her by now these are examples where one party rushes with examples to try to link it will discredit the other party and that this makes things so partisan and so I think we made a lot of good effort making bipartisan efforts for crypto and my hope is the Republicans in the house again are on the fine service committee or agriculture committee these folks are on different committees in their most try to score headlines here my hope is that they don't try to take these conspiracy theories and try to really twisted in their way saying after taxes of medium but the big bite and ministration like love fast when actuality Democrats and Republicans got donations here so we'll see what happens but I'm really concerned that the Republicans now are the ones who get parts and again another ones I've been in the right committees that we deal with all the time these are folks who are you have no idea about any of the situation that you see an opportunity get headlines

yeah yeah the the political machine right they they see all well they screwed up here okay we're gonna beat them over the head with it yeah yeah I let's hope it doesn't get to that so with this collapse ended in defeat the ripple of facts and and all the implications and so forth has this put a level or move the level of urgency to get crypto regulations up because this week we saw some literature on the White House website as far as G. twenty countries do you think we get something soon it may be early twenty twenty three

you know we could potentially get something this year did you know at least in our conference one noble bill that kind of resurrected from the dead it was a stablecoin bill and you know this exact situation really is about stable coins really I mean there is some type of applications but the large part it's been mostly focus on exchanges but there was a provision in the Maxine waters Patrick Henry builds that said you can't co mingle customer funds with you know your business account your other funds are utilized for your operations and we just saw that in the SPF case you're utilizing customer funds to pay off other great creditors and debtors and so many in Congress at least at the conference or saying that provision we won't solve the R. T. accentuation but that's only in law that we can have I think both sides yeah can easily agree to that now the question is do the end of time to get that done and there's still a lot of other holding points on the stablecoin bill but that was a constant theme is that that bills coming back while the DC CPA's probably slides of the not passing this year stable coins could get snuck in at the last minute what's up we'll see what happens with all these hearings but there's W. bipartisan push to get something done and you Maxine waters and Patrick Kennedy led their hearing on

last Tuesday

talk about this issue and so it's exciting to see our data coalition of of members of Congress who are set different sides he I was saying we need to put some together and move forward because a medic Republicans at least can say nah screw it we won't when touching things we have a power of the house but they are been very adamant sans a bipartisan approach on both the hearings and moving legislation forward so let's hope it stays that way but a lot remains to be seen and time is short

what do you think that and it kind of goes back to the initial question about building trust again because if the politicians the government's

they've all lost

faith in the industry a bit is it going to have to be the likes of blackrock and fidelity swore dabbling in crypto to cut now come into the driver's seat and say Hey look the the adults are in charge now these start ups thank nor them we're we're gonna make sure things are okay do you think that's a scenario that that's going to play out

we we did this with the bank to try do this may fail pretty spectacularly at least in the lobbying side they're pushing very heavily in the stablecoin bill for example saying that only banks can issue stable coins and these large legacy players have deep partisan roots our deep trip mines in recent policy from years of presence that you know you can't give it wasn't warrants on board you can get the Patrick Henry sophomore something there's Dublin divisions that are already there in Canada that's why the bank lobby hasn't been so successful in this area right now is that they usually have not been able to cut across party lines have been already established for years was in the crypto space we really don't have that right now new this couple things here and there like CDCs with there is some parts some rest over most part it's pretty bipartisan or nonpartisan and so on I don't think his legacy players are gonna help much and actually I've been going to get hurt a lot of our efforts you they try to do it for for good reasons or bad reasons I think they're gonna be praying detrimental for us especially the Democrat side of the aisle which is very untrustworthy to a lot of those legacy institutions so my hope is at least a lot of members have a more of a fact finding mode and make decisions themselves and you know is in our collective we're gonna try to help out as much we can with like the sorting fact from fiction of what happened because a lot of still up in the air yeah I don't see the legacy plaza gonna really help out here and if they you know they try to be successful or try to be helpful for the industry in crypto I think that backfired tremendously

it's a great point our final question here and I know this one's probably been difficult because we don't know you know what's gonna happen in the coming months but folks are of course of course angry at same big we freed like what is he going to jail so what's that process is going to be like to get him to the United States and will the you know the government essentially the folks in Congress have to make a call to get him here

I mean they could try to subpoena him did you have a story for that so we'll see if the house does that or if other committees tried to take that route we'll see if you comply as well no at least in my experience talking to a lot of policymakers and staff there's just general urge this man not only lights the the public has made a lot of my face this man we took a meeting he said they didn't do things like coming we have funds and lied right to my face you know when a member of Congress has that Fuhrman CEO just directly for saying something false that angers them in a way that I haven't seen in quite some time the space and so there's a lot of general but not saying like oh he made some bad business practices it's more of this man is a fraud I cannot believe you light and that is the the reaction on seeing on both sides the aisle no one's defending it as we have known if any of T. acts and as each report comes out by the hour more more folks in the staff sergeants me saying this is ridiculous this guy needs to go to jail and so we'll see if that happens but each more day it looks worse and worse for him and I think in DC if they can try to bring in here we'll see thing and the other one in the room ms at CZ I mean he has a role to play in this to some extent not saying on the a more the jail sorry fight that but he has a role here and folks in Congress NDC are not fans of binance by no means let's say I put in the same what categories tether and so FCX's now join the ranks of binance nav it's heather and opposing the easier to say we need to get some those parties and in front of us otherwise this unregulated crypto market is really going to hurt more folks United States and that's something that no one wants so we'll see what happens I'm gonna be successful but again those folks to find them but there's always a chance

well I hope us easy does it because I I know he's been talking a lot more to regulators to the news and so forth I think will be a good a good sign for him to come in and speak given that he's outside the United States at least

we got you I mean he has a lot of things correct knows a lot for perceptions from folks in the hill of Brian's and buys US largely because things really haven't been here even if they did have some folks in DC those lobbyists tend to not last long I don't know the full reasons but they do not have a good reputation especially by is the parent company in DC so my hope is that correct that's at least or at least be more transparent to folks in DC but there was some truth to what SPF cultural tweeted to CZ if he was allowed to be in DC or not ironically enough now so as to have probably should be in DC well we'll see it all plays out but it could be opportunity for binance working be the reckoning do you see a lot remains the same

sure I'll run always great information even though the you know the situation is not great right now but you know thank you for what you're doing in the boxing association is doing as well

as it's never boring they'll say that so appreciate what you're doing as well so thanks again for having me

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