US Representative Brad Sherman (D-CA 30th District) has made his position on bitcoin and cryptocurrency abundantly clear. He's not a fan. The crypto world's introduction to Sherman came in March of this year, when at a House Financial Services Subcommittee hearing on crypto, he eloquently opened his remarks with "Cryptocurrencies are a crock." He went on to say cryptocurrencies "allow a few dozen men in my district to sit in their pajamas on the couch all day and tell their wives they're going to be millionaires,” and that cryptocurrencies “help terrorists, criminals, tax evaders…" he repeatedly used words like fraud, larceny, crime, gambling.
In the March hearing, with a sarcastic grin he mocked readers of Ayn Rand’s Atlas Shrugged and The Fountainhead, saying “they believe [cryptocurrencies] are the new divinely inspired doctrines of our age.”
He came off as an arrogant politician, long ago acclimated to life inside the beltway and out of touch with ordinary folks.
Today’s House Financial Services hearing was more of the same. Sherman sounded just as ignorant about cryptocurrency and blockchain technology as he did four months ago, saying all the same things. Crypto supporters, Sherman asserted today, “delight in that cryptocurrencies are used for narcotics trafficking, terrorism and tax evasion.” His tired tagline — narcotics trafficking, terrorism, tax evasion — was repeated ad nauseum.
Today Sherman went even a little further though, saying “We should prohibit US persons from buying or mining cryptocurrencies.”
An outright ban, Sherman proposes. The reason? Besides his oft-cited narco-trafficking, terrorism and tax evasion (all of which occurred for literally hundreds of years before bitcoin), the only other reason Sherman gave was “mining alone uses electricity, which takes away from other needs and/or adds to the carbon footprint.” Look out hairdryers, you’re next.
Why is Sherman so firmly anti-crypto? One thing crypto has taught me is that everybody’s a shill. Whether on Twitter, YouTube or an internationally broadcast congressional hearing, beneath just about every public statement lies motive for making said statement. More often than not that motive is money.
Since Sherman hasn’t given us any convincing reasons for his hard criticism of crypto, let’s take a look at his campaign finance history and see if we can connect the dots.
Now in his tenth term in Congress, according to opensecrets.org, all-told Sherman has received a little over $17 million in donations. Not too shabby. Make no mistake though — he didn’t sit in his pajamas on the couch telling his wife he’d be a bitcoin millionaire, lobbyists gave him $17 million fair and square.
So he’s done alright for himself, but who are these generous folks lining his pockets? Let’s look at the last couple years specifically to see if there could be a connection to his position on crypto.
Hmm. Top industries for donations to Sherman this election cycle include Securities & Investment, Real Estate, Credit Unions. Interesting. Let’s drill down a little more…
Rep Sherman’s top company/group contributors this election cycle are:
Credit Union National Assn is by far the biggest credit union lobby. Their interests generally align with commercial banking — home loans, investments, escrow. Much or everything they do could potentially be replaced by cryptocurrency and blockchain. $20k donation to Sherman so far this cycle.
Garhwal, Chan & Williams website says they provide “wealth management services to high net-worth clients including individuals, families, Indian tribes, and public and private pension and profit-sharing plans.” So again a company that’s directly threatened by the success of cryptocurrency & crypto assets. $15.4k donation to Sherman so far this cycle.
Capital Group Company website states “We serve individual investors, financial intermediaries and institutions around the world through a broad range of products and services that include American Funds, one of the largest mutual fund families in the U.S. by assets under management.” The financial establishment again. $12.9k donation to Sherman so far this cycle.
Allied Wallet is a provider of e-commerce merchant services and online payment processing services. As of 2013 Allied had 88 million customers in 196 countries and processed 50 currencies. Ironic side-note about Allied — In 2010, Allied Wallet agreed to forfeit $13.3 million to settle allegations by the US DoJ of involvement with illegal gambling at offshore websites. Seems like Sherman would NOT be a fan. $12.5k donation to Sherman so far this cycle.
OK — starting to sense a pattern here? All of Sherman’s top donors are directly threatened by crypto. They all belong to the first wave of businesses that crypto stands to disrupt, and possibly replace.
As nice as it would be to believe Rep Sherman’s opposition to cryptocurrency is genuinely rooted in a desire to protect the American people from something he thinks is dangerous, it turns out it’s just good old-fashioned American lobbying and special interest. He’s a career politician who’s a multi-millionaire as a result of his “service.” The only thing that threatens him personally is not being reelected. Like just about every other congressperson he ensures his livelihood by accepting donations from special interest groups, and in return he serves their interests, often before or instead of those of his constituents.
I wonder how many of the good folks in California’s 30th Congressional District hold bitcoin or crypto. I wonder how their portfolios and the futures of their families are affected when the Honorable Brad Sherman sits in a congressional hearing before a worldwide audience and declares: “We should prohibit US persons from buying or mining cryptocurrencies.” They’re probably affected considerably, as the market is very reactive to fears of US regulation. It’s troubling to see what motivates lawmakers like Sherman, but at the end of the day I guess he’s just another paid shill.
Sources:
Replay of today’s hearing: https://youtu.be/Dh_JskUngik
https://www.opensecrets.org/members-of-congress/summary?cid=N00006897
https://www.opensecrets.org/orgs/summary.php?id=D000000136
http://gcwinc.com/
https://www.capitalgroup.com/
https://web.archive.org/web/20150424002027/http://www.highbeam.com/doc/1G1-237229715.html