Congressman Brad Sherman, a Democrat who represents a Southern California District in the San Fernando Valley, has called on fellow congressional reps to ban cryptocurrencies. He asks that they do so on the basis that cryptocurrencies’ “sole” application is for the undermining of the rule of law, including United States foreign policy and the US dollar’s dominance as the global reserve currency. A short video of Rep Sherman’s comments was tweeted out by CoinCentre, a cryptocurrency-industry lobbying group based in Washington, DC. The tweet from CoinCentre also includes the comment, “This is why Coin Centre is needed in DC now more than ever.” In the video, Rep Sherman states: “I look for colleagues to join me in introducing a bill to outlaw cryptocurrency purchases by Americans so we nip this in the bud, partly because an awful lot of our international power comes from the fact that the dollar is the standard unit of international finance and transactions. Clearing through the New York Fed is critical for major oil and other transactions.” Sherman included comments that hint at the ideology and beliefs espoused by many cryptocurrency founders and users, which typically lean towards libertarianism, anarchism, anti-imperialism, a preoccupation with privacy and moral relativism. Crypto media outlet Bitcoin.com, founded by early Bitcoin adopter and Bitcoin Cash creator Roger Ver, perhaps best exemplifies the ideological preferences of many crypto supporters, who are typically highly suspicious of the US government, its federal reserve and of traditional banking in general. While still a very young technology entrepreneur, Ver was jailed for selling large “firecrackers” prohibited in the US because they can be used to detonate explosives. Ver was badly affected by the experience and has spoken bitterly of being deprived of his human rights in jail. Ver studied Japanese while incarcerated, eventually moved to Japan and has renounced his US citizenship. Crypto enthusiasts like Ver envision autonomous “Internet money” systems that are beyond the control of any one state or entity. In practice, however, cryptocurrency’s main use so far appears to have been for speculation by investors and “underground” transactions, including drug deals, illicit purchases on the Dark Net, and money laundering. “Crypto’s” philosophy does contrast with American foreign policy objectives, where the US dollar’s global dominance is seen as an important means of protecting US security and interests. Rep Sherman expressed that notion while proposing a bill to ban cryptocurrencies: “…(I)t is the announced purpose of the supporters of cryptocurrency to take that power away from us and put us in the position where the most significant sanctions we have on Iran, for example, would become irrelevant.” “So whether it is to disempower our foreign policy, our tax collection enforcement, or our traditional law enforcement, the purposes of cryptocurrency, the advantage it has over sovereign currency, is solely to aid in the disempowerment of the United States’ rule of law.” Sherman’s call differs significantly from legislative efforts currently being undertaken in the US by other policymakers, who state that they wish to foster the cryptocurrency and “digital asset” sectors as a means of innovating in capital formation. In March, the state of Wyoming passed five cryptocurrency bills, bills previously described in Crowdfund Insider as follows: HB 19: the Bitcoin Bill – which exempts platforms from the Money Trends Bidder Act. (Wyoming is one of three states where Coinbase does not operate because of this.) – which exempts platforms from the Money Trends Bidder Act. (Wyoming is one of three states where Coinbase does not operate because of this.) HB 70: The ICO Utility Token bill HB 101: The Blockchain records bill , similar to Delaware regulation for bookkeeping on Blockchain. , similar to Delaware regulation for bookkeeping on Blockchain. HB 126: The series LLC bill – Tangentially related to the Blockchain Bill (currently exists in about 15 states) – Tangentially related to the Blockchain Bill (currently exists in about 15 states) SF 111: Digital assets property tax exemption A coalition of bipartisan US politicians has also introduced the Token Taxonomy Act of 2019 (H.R. 2144) legislation in the House of Representatives. According to Crowdfund Insider, the Token Taxonomy Act, “…is designed to enable a digital asset that is a utility token unregulated by the Securities and Exchange Commission (SEC).” The bill reportedly seeks to: “… exclude digital tokens from the definition of a security, to direct the Securities andExchange Commission to enact certain regulatory changes regarding digital units secured through public key cryptography, to adjust taxation of virtual currencies held in individual retirement accounts, to create a tax exemption for exchanges of one virtual currency for another, to create a de minimis exemption from taxation for gains realized from the sale or exchange of virtual currency for other than cash, and for other purposes.” Crypto Invest Summit organizer and Venture Capitalist, Alon Goren, has responded to Rep Sherman’s call for a ban by inviting him to publicly debate cryptocurrencies at any large venue in LA. Dear @BradSherman, I run the largest group of techies and entrepreneurs in your district and surrounding areas. Thousands of members (your constituents). I'll get @tocap or any large theater in area & stream it. Let's debate this civilly. Name the time. You can pick moderator. -A https://t.co/1UcAVCWeGD — Alon Goren (@AlonGoren) July 18, 2018 Modulus CEO Richard Gardner has also urged Rep Sherman to consider how a digital currency issued by a state could add transparency to a financial system and thereby reduce unemployment and corruption.<doc-sep>Bloomberg (Bloomberg) -- Hedge funds often measure their investments in minutes, not decades; but for Anchorage Capital Group, its long-held stake in Metro-Goldwyn-Mayer Studios Inc. is proving that patience can also be profitable.The New York-based money manager stands to make roughly $2 billion on its investment in the film and TV producer, one that began almost 11 years ago with MGM in bankruptcy court. Amazon.com Inc. agreed to buy the company for $8.45 billion Wednesday, a price that includes just under $2 billion in debt.The deal is in many ways a vindication for Kevin Ulrich, the former Goldman Sachs Group Inc. trader who co-founded Anchorage in 2003 and was part of a group of distressed debt investors that took control of MGM as it went through the restructuring process. In recent years the stake looked to be an albatross for the fund, one that came with significant drama in its own right.Ulrich brought in and later fired a high-profile chief executive officer, resisted efforts by activist investor Carl Icahn to take control, and held out for a bigger payday after years of considering various exit strategies. By selling now, as demand for media content from entertainment and technology companies alike is booming, he’s proving his long-held faith in the investment was justified.“There was a lot of maneuvering, a lot of financial engineering,” said Steven Azarbad, chief investment officer at New York’s Maglan Capital, an MGM investor who sold his shares four years ago. “But they’ve done great.”A representative for Anchorage declined to comment.When Ulrich first invested in MGM, he was new to Hollywood. He helped pick Gary Barber, a South African-born producer of films such as “Ace Ventura: Pet Detective” as chief executive officer of the storied but debt-laden studio. Barber brought to the table a shrewd business sense, and connections into a world Ulrich long admired from afar.Barber shepherded MGM’s development of “The Hobbit” franchise, a co-production with Warner Bros., that became a global smash hit. He helmed the release of the James Bond film, “Skyfall,” which generated over $1 billion at the box office, and he revived the studio’s work in television. Barber also brokered a deal to bring on TV super producer Mark Burnett, which gave MGM access to reality show hits like “Survivor” and “The Apprentice,” but would ultimately become personally troublesome.In 2012 the company bought back Icahn’s stock for $590 million. It also filed paperwork for a possible public offering of shares, and considered other options, such as a sale.As Barber boosted MGM’s film and TV pipeline, Ulrich was increasingly entranced by the allure of Hollywood. He became a regular at movie premieres in Los Angeles and New York, and frequented industry parties in the Hamptons and elsewhere. He became active in creative decisions after becoming chair of MGM’s board -- somewhat unusual for a non-executive lacking Hollywood experience -- even getting involved with business granularities like casting.Growing RiftBut over the following years a rift began to open up between Barber and Ulrich. When it was time to renew Barber’s contract in 2017, Ulrich conducted an extensive search for a new CEO. When it ended, he ultimately chose to sign Barber to a new five-year deal. Yet around the same time, the pair split on whether to sell the company, with Ulrich wanting to hang on to the studio and Barber saying it was time to find a buyer.The company would hold buyout talks with Apple Inc. as well as Chinese investors that would ultimately prove fruitless.Only months after renewing Barber’s deal, Ulrich fired him. The shock departure meant the company had to pay Barber for five years of salary and buy out his equity, a package totaling $260 million. In the three years since Barber left, Ulrich hasn’t replaced him, instead operating an “office of the chief executive officer,” comprised of various people that each have their personal vision for MGM.Barber declined to comment via his spokesperson.Bounce BackAfter the initial period of success following the restructuring, the gains became harder to come by, as they did in Anchorage’s overall credit-focused business. Two senior managers left the firm in January 2020, and another in November. Anchorage’s flagship strategy, with about $8.5 billion under management, returned just 0.6% in 2018, 1.5% in 2019 and 4.4% in 2020, according to people familiar with the matter.In December, MGM hired investment bankers for a potential sale.MGM only released one film in theaters in 2020. Its biggest potential hit, the latest Bond film, “No Time to Die,” was pushed from last year to this October as a result of the pandemic.Yet the value of MGM’s library rose as everyone from media companies to technology giants have sought to build video streaming platforms that can compete with industry leader Netflix Inc. Earnings jumped 48% last year, to about $307 million, even as sales declined.Anchorage holds a roughly 30% stake in MGM, worth about $2.5 billion in the sale, said people with knowledge of the matter. Anchorage invested around $500 million in the company more than a decade ago. Including the MGM stake, Anchorage’s flagship fund is up 18% this year, the people added. The fund has gained about 8% in 2021 not counting the studio.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.<doc-sep>
Share this article Urgently calling on Congress to “nip this in the bud”, U.S. Congressman Bradley Sherman recently proposed a bill outlawing the purchase of cryptocurrencies in America. His reasoning, whilst intended to convince Congress of the dangers of cryptocurrency, ironically illustrates the genuine value and utility of the unstoppable technology. Senator Sherman shared his reasoning for the ban when proposing the bill to representatives: “… an awful lot of our international power comes from the fact that the dollar is the standard unit of international finance and transactions. Clearing through the New York Fed is critical for major oil transactions.” Sherman rightly points out that many in the cryptocurrency community are opposed to the global politics played via the American dollar, and the subsequent unrest and corruption this influence is perceived to cause globally. He elaborated that “… it is the announced purpose of the supporters of cryptocurrency to take that power away from us, to put us in a position where the most significant sanctions we have on Iran, for example, would become irrelevant.” The United States exerts considerable power via the tool of USD currency, requiring the international trade of oil, for example, to be settled under the authority of the American dollar. If nations such as Iran wish to shift away from the current USD-imposed hegemony, cryptocurrency could serve as the ideal escape hatch. The people of Iran appear to already be aware of this loophole, as can be observed by the growth in the popularity of bitcoin trading via localbitcoins over the last couple years in the heavily sanctioned country. Sherman continued his argument: “So whether it is to disempower our foreign policy, our tax collection enforcement, or traditional law enforcement, the purposes of cryptocurrency, the advantage it has over sovereign currency is solely to aid in the disempowerment of the United States and the rule of law.” Ironically, Sherman’s fear-driven arguments offer up all the reasons to support cryptocurrency. Many American citizens do not wish to see their wealth and taxes being washed away in a sea of indefinite wars and permanent quantitative easing. The Congressman also points to the value of freedom in a currency that is not bound by any sovereign nation and is instead, self-sovereign, by nature of its decentralization. Sherman further revealed his naïveté by suggesting that cryptocurrency can simply be banned and thus, controlled. Alternatively, one could surmise that he is counting on the ignorance of others in his efforts to persuade voters; and is fully cognizant of the fact that the nature of cryptocurrency prevents it from being centrally controlled. While it could be made more difficult to transact, by blocking on-ramps such as exchanges that provide fiat to crypto purchases, it is impossible to stop the flow of cryptocurrencies due to the decentralised nature of their networks. Particularly in the case of nations wishing to circumvent sanctions, for example, it would be virtually impossible to halt the trading of cryptocurrency from one nation to another. This, as the senator so eloquently illustrated, is what makes cryptocurrency special. Interestingly, the Congressman conveniently neglected to recognise that criminals far and away prefer to use fiat cash, in particular USD cash, as a means of exchange, with its characteristic lack of transparency and traceability. Opensecrets.org offers some perspective on Sherman’s possible motivations for being so adamantly opposed to a technology that he appears to not fully understand. Top lobbying clients contributing to Sherman’s Democratic party include VISA, Mastercard, Discover Financial, and Capital One. Top campaign donors for Sherman include Royal Business Bank, Capital Group Companies, and Northrop Grumman, a “leading global security company”. It does not take a great deal of imagination to infer why these parties may be threatened by the widespread adoption of a non-sovereign currency that allows permissionless and trustless transactions, as well as the independent storage of value. Although Sherman might be motivated by corporate interests, his justifications inadvertently serve as convincing arguments for the transformational power of cryptocurrencies.