Oklahoma

Oklahoma’s Frank Lucas could be key congressman in cryptocurrency regulation

Most Oklahomans probably think of 3rd Circuit Congressman Frank Lucas as an “ag guy.”

And he is. Lucas, himself a farmer and rancher, was a former chairman of the House Agriculture Committee and responsible for the 2014 Farm Bill.

But Lucas is also a “financier” and is in an unusual position to influence legislation resulting from the FTX cryptocurrency collapse. When the 118th Congress kicks off on Jan. 3, Lucas expects to be a senior majority member on two committees with the potential for significant crypto responsibilities.

Lucas was a member of what is now the House Financial Services Committee shortly after entering Congress in 1994 and is its longest-serving Republican. He also expects to return to the Agriculture Committee after a multi-year hiatus.

Ag’s involvement in cryptocurrency may surprise some, but it oversees the Commodity Futures Trading Commission (CFTC). The public associates the CFTC most with pork bellies and grain futures, but it also regulates complex financial instruments — what many consider cryptocurrency, Lucas said.

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Financial Services regulates the Securities and Exchange Commission, whose main job is to monitor the markets against fraud and manipulation. Some people believe that cryptocurrency also falls into this category.

In a phone interview on Wednesday, Lucas said an exact course has yet to be determined, but that regulation is clearly in order after FTX’s spectacular collapse and the arrest of its 30-year-old founder, Sam Bankman-Fried.

“It’s the Wild West environment that we’ve worked in that has given people who were good salespeople or sophisticated con artists, however you want to describe it, the ability to manipulate and secure vast resources,” Lucas said .

“That bubble has now burst,” he said. “If crypto is to continue to exist, then it needs to be regulated to reflect – we can’t just have the Wild West anymore.”

Lucas said some Democrats want to ban crypto outright, while some Republicans “believe this is the future of all currency transactions.”

Lucas said he’s somewhere in between, but since last summer has been proactively warning voters against only investing in cryptocurrency money they can afford to lose.

“As we saw with the FTX collapse over the past few days, even the most sophisticated large investors and mutual funds have been burned down,” Lucas said.

Patrick McHenry, chairman of the North Carolina financial services division, said, “is very keen that if we’re going to keep having this stuff, we have to have laws and regulations.”

“I don’t know how bad it’s going to be if this all finds its way, but it’s going to be bad.”

FTX is an international cryptocurrency exchange that went bankrupt last month after reports that Bankman-Fried had overstated its value and possibly looted its assets.

FTX executive CEO John Ray said Tuesday at a Financial Services Committee hearing that only about $1 billion of up to $7 billion invested in the company had been found.

Some of the money apparently went to members of Congress as a campaign donation. Lucas appears to have received none of this.

Lucas is set to become chairman of the House Science, Space and Technology Committee and will need a waiver from GOP leadership to serve on all three committees, but he said he believes that will happen.

Aside from an apparent disdain for Bankman-Fried and concern for investors, Lucas hasn’t revealed much about his expectations for cryptocurrency regulation.

“Ultimately we’ll know if he was a fool or a crook,” Lucas said, “but he presented himself as the wonder boy who was smarter than everyone else, who could see and do things no one else could understand.” Now I assume he’s going to be a guest of the United States government for a long, long time.”

“I’m afraid there will be some of my constituents whose pension prospects have really gotten a lot worse because of this guy.”

Featured Video: Poll Shows Americans Don’t Really Understand Crypto

Americans don’t really understand cryptocurrency. Buzz60’s Keri Lumm shares the findings of a new study conducted by OnePoll on behalf of Coinbase.



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