As someone that works on Capitol Hill, I have what some would call a blessing but I call a curse in being in the thick of it when it comes to Members either discussing or proposing legislation dealing with crypto. Something I learned early on was how the Government Accountability Office or GAO for short has been releasing studies for Congress on crypto since right around 2017/2018. With reports being issues for this long it still surprises me what comes out of some Members' mouths (Congressman Brad Sherman and anything to do with crypto). Already this week... and it is Tuesday mind you... there have been three pretty big things that have come out on The Hill and two of them I do not think are getting the coverage that they should be. 

Energy Usage

Ever since the price of Bitcoin went soaring last year a quick and common critique for the currency was the way that it was "dirty" that it was a detriment to the environment and that nothing good came out of a "mined" or Proof of Work (PoW) currency. I could be unique in my thinking but I really do not think that I am when I say applying common sense and all of the industry and production that goes into physical currency production when so many of our transactions are digital really changes the idea of how dirty the production is. Many many countries right now are burning fossil fuels for electricity which in turn is being used to not only turn on the lights but power the building and the machines inside of them that produce these very currencies. 

When I read that 7 Members of Congress had written to the EPA and Department of Energy about cryptocurrencies energy usage I have to admit I ignored it at first. It may not seem like it but members of Congress writing to agencies and departments is pretty common here on the hill and often they will gather support due to others thinking the same way. What made me circle back to it was twofold. The first was that for whatever reason several major news outlets were talking about it and the other was who had signed on to this letter with Sen. Elizabeth Warren being front and center in bashing the industry as a whole. I looked through the letter and have attached it at the bottom but looking at this from a purely logical point of view looking at 7 miners in the US and applying that to the rest of the world is an incredibly poor idea. Simply said the US does not represent the rest of the world so thus the application of the US to the industry as a whole is fundamentally flawed. 

Even within the US, it is extremely hard to be able to apply one region of the US to another. While in New York we have seen natural gas plants come online for mining in areas like Texas they are being utilized to consume power from everything from nuclear to natural gas to solar to boost the total amount of capacity that is online at any point in time. According to the letter the mining companies that they received information from were so bad they needed to be investigated. What is not mentioned though is how several of these companies are publicly traded and thus are regulated to the umpteenth degree. The more and more you look into it the more the argument falls apart. Especially when you see the studies of how the amount of renewables being used as power sources is continuously growing. It is not like Bitcoin is stuck on coal or oil rather it has been moving toward the cheaper and more efficient fuel. 

Bipartisan Crypto Legislation

Last month fantastic news hit the crypto space as in the Senate a bipartisan bill had been struck that helped clarify some of the rules and regulations around cryptocurrency. In DC the Blockchain Association and other lobbying groups were in favor of this legislation as it helped provide clarity and was not invasive in its regulation at all. There really was not much to dislike about the proposed legislation and many people were optimistic that it would be voted on sooner rather than later. 

This is where I will say it helps working up here because you get a feel for how things are going, where priorities are, and if there is an appetite for the legislation. Considering all of these things from the beginning I have stated that this seemed to be a bill that lays the foundation for next year/the next Congress. Tuesday this belief became a reality as Sen. Lummis stated that the bill would probably not be considered until next year due to the various Senate committees involved that would have to green-light the legislation. This does not even take into account the House side where I work that had and continues to not have any sort of inkling to pick up any legislation that deals with crypto right now or in the foreseeable future. 

Now while this development of the legislation being pushed until next year is far from ideal there is one reason why it is not the end all be all. Plain and simply it gives the market time to recover it gives the market time to show regulators that it can bounce back and regain forward momentum. If the crypto markets can do this it will be a huge sign for regulators that these markets are not as crazy as they try to make them sound and that without government intervention the industry can recover. 

The Infamous Congressman Brad Sherman

Representative Brad Sherman from California might be the true OG when it comes to any Congressional Member hating crypto and not being afraid to say it. His first comments about it were from 2019 when during a Congressional Hearing he argued that it should just be banned outright much to the surprise of others. At that time publicly crypto was not that big of a thing since its bubble had popped and it had faded from the limelight. Rep. Sherman though does not want to fade though as he has consistently been someone in Congressional hearings airing grievances and trying to discredit and bash crypto as often as he could. 

The most recent of these has been in yesterday. As the Chairman of the Financial Services Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets he has gained a much larger voice. Tuesday's hearing dealt with the SEC and Chairman Sherman made sure to go after SEC Enforcement Director Gurbir Grewal in the Ripple vs SEC court case. His issue this time was that the SEC had not gone after any of the crypto exchanges that had offered the XRP currency. Now as speaking as someone who has watched similar things occur if we were to say the SEC lost the court case then the crypto exchanges that had offered it and then were investigated would have recourse against the SEC, the Federal Government, etc. Since this is a case that is and has been currently pending right now the SEC does not have any basis to continue its investigation. 

To me, one of the most stunning things was that Rep. Sherman told the SEC official that you have to take cases that you will not win... what an amazing use of taxpayer money. Know you are not going to win a court case but pursue it anyway because well ya know you cannot win them all. Honestly, the logic of this man sometimes physically hurts me. Instead of letting the SEC focus its resources on a case that they think that they could win and then move out from there, Sherman thinks that they should spread out and shotgun the approach which I am not sure I have ever seen someone argue for in government enforcement policy. 

If this gives you any insight into how bad that case is going Ripple General Counsel Stuart Alderoty called Sherman out and highlighted that "only the court can make a determination — it's called due process". I mean when you are getting tweeted at and being able to be called out in your hearing by the opposing attorney because of how poor the case is well maybe the person making the comments should pay attention. Until this case has run its course and if any appeals have transpired and run through then it would be absurd to jump the gun but this is exactly what Rep. Sherman is calling for. Facts of the case still are missing and have not been presented and that is something that needs to be done before we rush any judgments why a member of Congress would forget that is something that puzzles me. Personally, I just wish that this Representative would take the time to learn about what he is saying because for years now he has either refused to or for whatever reason cannot connect the dots to realize that this is a huge plus/boon for the American economy and American innovation overall. 

Please know I am not a financial advisor and make sure you do your own research! If you enjoyed this article and would like to further support me below are a few referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_

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