Millionaire investor and Shark Tank cast member Kevin O’Leary appeared in front of the Senate Banking Committee on Wednesday to defend cryptocurrency amid skepticism arising from the FTX collapse, which saw over $1 billion in investors’ money go missing overnight.
In the committee hearing, O’Leary went toe-to-toe with Senator Elizabeth Warren who has long been a staunch opponent of the legitimization of cryptocurrencies. The Massachusetts Senator questioned O’Leary whether the current regulation on the industry was strict enough to protect investors, in transcripts shared by Fox News.
“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. 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?”
O’Leary, a proponent of more regulation for crypto exchanges, gave an amazing response to the question.
“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. 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.”
According to Fox, this is where Warren jumped in to stop O’Leary from continuing and to interject another question of her own, asking,
“I appreciate your point that everyone tries to engage in money laundering. 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?”
An exacerbated O’Leary responded with the following.
“No! 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.”
O’Leary makes a good point, that fraud with proper regulation the dangers of fraud with crypto will be no greater than with the US Dollar.
He also spoke about the arrest of FTX’s founder Samuel Bankman-Fried and how it may prove to have a “silver lining” for the entire industry, in another quote shared by Fox News.
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“In fact, the recent collapse of crypto companies has a silver lining. This nascent industry is culling its herd. Going or gone are the inexperienced or incompetent managers, weak business models and rogue unregulated operators. Hopefully, these highly publicized events will put renewed focus on implementing domestic regulation that has been stalled for years.”