by Scott McClallen
U.S. Sen. Debbie Stabenow, D-MI, received at least $55,600 in donations this year from employees of FTX, a cryptocurrency exchange platform that declared bankruptcy after allegedly misusing client funds.
Then, Stabenow, who as Agriculture Committee Chairwoman oversees the Commodities Future Trading Commission, a cryptocurrency regulator, sponsored legislation to regulate cryptocurrency.
Michigan Capital Confidential first reported the story, citing Federal Election Commission records.
Coindesk reported that FTX founder Sam Bankman-Fried consistently met with regulators and lawmakers and pushed for crypto regulation, including lobbying for the Digital Commodities Consumer Protection Act, Stabenow’s bill. The bill seeks to give the CFTC more authority to regulate digital commodities like FTX.
Bankman-Fried tweeted on Oct. 18, 2022, “I’m optimistic that the Stabenow-Boozman’s bill will provide customer protection on centralized crypto exchanges without endangering the existence of software, blockchains, validators, DeFi, etc. If I were convinced I was wrong about that, I would not support it.”
Bankman-Fried backed Stabenow’s bill and paid bill cosponsor Sen. John Boozman, R-Arkansas, $8,700; cosponsor Sen. Kirsten Gillibrand, D-N.Y., $5,800, and cosponsor Sen. Cory Booker, D-N.J,. $5,700, according to FEC records.
At one point, FTX claimed to be worth $32 billion before its collapse.
On Tuesday, Bankman-Fried was charged with eight criminal counts: conspiracy to commit wire fraud and securities fraud, individual charges of securities fraud and wire fraud, money laundering, and conspiracy to avoid campaign finance regulations.
A message left Thursday seeking comment from Stabenow’s office hasn’t been returned. It’s unclear if Stabenow still supports the bill.
In a Nov. 10 statement after FTX collapsed, Boozman doubled down on the need for the legislation.
“Chairwoman Stabenow and I remain committed to advancing a final version of the DCCPA that creates a regulatory framework that allows for international cooperation and gives consumers greater confidence that their investments are safe,” he said.
At a Sept. 15 hearing, Stabenow still backed the bill to enforce “guardrails” to protect consumers.
“As its name suggests, our bill is focused on consumer protection,” Stabenow said. “It will require that platforms segregate and safeguard customer assets, hold sufficient capital and abide by rigorous cybersecurity standards. It will eliminate many of the conflicts of interest in this market. And it will mandate that platforms speak truthfully about the risks of trading digital commodities and don’t engage in misleading advertising.”
The crypto market has lost $2 trillion in just over a year, according to CNBC.
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Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.
Photo “Debbie Stabenow” by U.S. Senate Photographic Studio. Background Photo “Cryptocurrency” by Alesia Kozik.
