Sen. Elizabeth Warren (D-MA) and well-known Canadian investor Kevin O’Leary butted heads during a Wednesday hearing of the Senate Banking Committee on new federal regulations for cryptocurrency following the downfall of digital asset exchange FTX.
The company filed for bankruptcy last month after bringing in numerous multi-million dollar investments earlier in the year. FTX was controlled by Sam Bankman-Fried, who was arrested in the Bahamas last week after being indicted by American officials for various types of fraud.
Warren, a longtime critic of the cryptocurrency industry, commented that criminals and state sponsors of terror use digital currencies in order to launder money. She asked O’Leary if “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.”
“No, I think we should apply the same regulatory structure that we apply to existing trading of stocks and bonds. An exchange is tied to broker-dealers,” he answered. “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 sixties 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.”
Shark Tank's @kevinolearytv takes Elizabeth Warren to school on the crypto.
— Washington Examiner (@dcexaminer) December 14, 2022
Warren countered by saying that “everyone tries to engage in money laundering,” before stressing that in her view rules prohibiting money laundering should apply to “crypto in the way that they apply to banks, to stockbrokers, to credit card companies.”
O’Leary rebutted that investors could address the alleged money laundering issue “overnight” if they understand “client rules on both sides of the transaction and use a crypto such as USDC that is regulated.”
As Warren, known in some circles as “Pocahontas,” pointed out, O’Leary himself lost approximately $15 million that he was owed by FTX.
“Total deal was just under $15 million, all in,” O’Leary told CNBC. “I put about $9.7 million into crypto. I think that’s what I lost. I don’t know. It’s all at zero.”