Records have revealed that a prominent US senator, who is known for being close to President Joe Biden, placed a significant financial bet against the country’s economy last month. This revelation comes at a time when the cryptocurrency industry is facing increasing regulatory pressure from US watchdogs, who argue that it poses a serious threat to the economy.
Senator Thomas Carpel, a member of the Senate Finance Committee, disclosed this week that his wife purchased shares worth up to $95,000 in the Ranger Equity Bear ETF and ProShares Short QQQ on July 13. These funds are designed to short stocks as a precautionary measure against economic downturns. Interestingly, this is not the first time the Carpers have made such a bearish bet on the economy. Reports suggest that they made a similar wager last year by acquiring up to $110,000 in the Ranger Equity Bear ETC.
This move by a sitting congressman to short the US economy has not been well-received by many in the cryptocurrency industry, which has been facing a hostile regulatory climate for several years. Several crypto players took a jab at the bets, especially considering that Carper had referred to Biden as a “dear friend” earlier this year in a tweet that is still pinned to his Twitter profile.
The Biden administration, on the other hand, has expressed concerns about the turmoil in the cryptocurrency markets and its potential impact on the financial health of average Americans. Carper’s office has previously downplayed the senator’s stock transactions, claiming that they are conducted independently by the family’s financial advisor.
However, experts point out that monitoring lawmakers’ investments for potential conflicts of interest is challenging due to the outdated Capitol Hill rules that have not kept pace with the significant changes in the investment landscape over the past five decades. While employees of the White House and its departments face stricter regulations regarding funds targeting specific sectors or countries, members of Congress have more leeway to invest in non-diversified funds as long as they are publicly traded or accessible.
The Stop Trading on Congressional Knowledge (STOCK) Act was passed in 2012 following several insider trading scandals during the global financial crisis. This act effectively banned lawmakers from trading based on “material, non-public information” obtained through their positions or job. However, enforcing insider trading laws against members of Congress is not easy due to constitutional protections that shield them from judicial questioning regarding information obtained during their political duties.
The actions of Senator Carper have raised questions about the need for further reforms in monitoring lawmakers’ investments and potential conflicts of interest. As the cryptocurrency industry continues to face regulatory scrutiny, it remains to be seen how these developments will impact the broader economy and the future of digital assets.