Josh Riley votes to keep CryptoCurrency Scams and corruption in the dark
Yesterday, this podcast observed a troubling removal of standard communication by the office of US Representative Josh Riley: The Congressman has removed links to information about his legislative actions and public events from his official congressional web site. It’s an unusual thing for an elected public servant to cut back on the information voters can access about their meetings and activities. It ought to make voters suspicious.
People also ought to be suspicious when financial transactions involving government officials are placed behind a wall of secrecy. Nonetheless, that’s just what the US House of Representatives did this week, and Josh Riley helped them do it.
This story involves taxes, and taxes are a sensitive subject for a lot of people, especially at this time of year, as we approach the deadline for filing federal income tax. They’re a sensitive subject for me. With housing and grocery prices going up, a lot of gig workers, business owners, and freelancers struggle to pay their taxes. They work hard for their money, and it has never been more expensive to live in the United States than it is today.
Not everyone makes money by working for it, though. Financial speculators, for example, make money by placing elaborate bets, hoping that they’ll be able to buy a financial security at a low price and sell it at a high price. This activity doesn’t make the world a better place. It doesn’t result in any practical work getting done. It’s just playing games with money in order to make more money.
Financial speculation in securities has always attracted unscrupulous people who are looking for ways to get rich at the expense of other people. That’s why Wall Street is well-regulated. Securities traders are required to report information about their financial transactions to the federal government.
These regulations exist to ensure that securities trading is honest, and doesn’t cheat people through fraudulent schemes. These regulations also prevent money laundering and other criminal conspiracies by organized crime networks. It’s worth remembering that when Al Capone was arrested, it wasn’t for extortion, theft, or murder. He was arrested for failing to report his financial activities to the federal government.
The United States has securities regulations to protect the American people from fraud and organized crime, and that should be the end of the story. Unfortunately, it’s not.
Over fifteen years ago, Bitcoin was invented. Bitcoin is a cryptocurrency, a term that obscures what Bitcoin actually is. For a few years, Bitcoin fans claimed that they had created an actual digital currency, a sort of money that could be used to purchase things online. Since then, it’s become clear that Bitcoin is not much of a currency at all. The complexity of using Bitcoin, combined with the high fees involved in every Bitcoin transaction, have made it all but useless as a currency.
Instead, Bitcoin and other cryptocurrencies have become securities. They’re vessel for financial investment, things that people buy and sell in order to try to make a profit.
As securities, cryptocurrencies are highly risky. That’s because have largely escaped regulation. When people are cheated of their cryptocurrency holdings, they have little recourse, and the world of cryptocurrencies is full of scams.
One of the most pervasive forms of fraud in the cryptocurrency world is the pump and dump scheme, in which groups of cryptocurrency owners organize behind the scenes to artificially create a false impression of growing value in a particular cryptocurrency, only to abruptly sell their own holdings, making a big profit while leaving everybody outside of the small group of conspirators with nothing but an electronic wallet full of cryptocurrencies that suddenly have no value.
These schemes are explicitly illegal in securities trading. However, cryptocurrency lobbyists have successfully convinced the federal government to refrain from applying securities law to cryptocurrency exchanges.
When I say that cryptocurrency lobbyists have successfully convinced the federal government, I’m speaking euphemistically. What I should say is that cryptocurrency lobbyists have bribed government officials, including members of Congress and Donald Trump, the current President of the United States. After cryptocurrency lobbyists paid Donald Trump huge amounts of money, Donald Trump nominated the following cryptocurrency insiders to federal government positions that have the power to regulate cryptocurrency. Instead of regulation, the Trump Administration is allowing cryptocurrency schemes to do practically whatever they want, with no legal accountability.
Scott Bessent, Secretary of the Treasury
Howard Lutnick, Secretary of Commerce
Paul Atkins, head of the Securities and Exchange Commission
David Sacks, Cryptocurrency Czar
Bo Hines, Executive Direct of the Crypto Council
Hester Peirce, Commissioner of a new SEC Cryptocurrency Task Force
Travis Hill, Chair of the FDIC
Jonathan McKernan, Director of the Consumer Financial Protection Bureau
Jonathan Gould, Comptroller of the Currency
Caroline Pham, Chair of the Commodity Futures Trading Commission
At the same time, cryptocurrency has become a conduit for open bribery of federal government officials. Donald Trump himself runs a cryptocurrency business, World Liberty Financial, while serving as President, and created a cryptocurrency memecoin after his election, which promptly engaged in a pump and dump scam. Last month, cryptocurrency scammer Justin Sun deposited 75 million dollars into the accounts of President Trump’s cryptocurrency company. Almost immediately after this deposit of money was made, the Trump Administration announced that charges of fraud and market manipulation against Justin Sun were dropped.
Cryptocurrency is bad news. It doesn’t decentralize finance, as it promised to do, as centralized gatekeepers control the crypto economy and make huge profits as middlemen in every transaction. It doesn’t bank the debanked, or challenge authority. To the contrary, cryptocurrency insiders helped install Donald Trump as the most authoritarian President in American history.
What does all of this have to do with Congressman Josh Riley?
On Tuesday, Ithaca’s US Representative, Congressman Josh Riley, voted for legislation that enables cryptocurrency scammers to keep their crimes hidden in the shadows.
I didn’t take note of this vote when I first saw it, because the language of the bill was purposefully obscure. The legislation has the following title: “H.J. Resd 25 - Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Internal Revenue Service relating to "Gross Proceeds Reporting by Brokers That Regularly Provide Services Effectuating Digital Asset Sales".
I’ll admit it: When I first saw that Josh Riley had voted for this legislation, I dismissed it as a financial issue I couldn’t understand. That was negligent of me. I was too easily deterred by obtuse language. That’s a trick that cryptocurrency scammers have used to evade scrutiny for years.
It was only when I read an article about the legislation that I realized I had been duped. I circled back to the legislation, and looked to see just what Josh Riley had voted for.
The legislation was introduced by Republican Congressman Mike Carey on January 21, around the same time that Donald Trump perpetrated his Trumpcoin pump and dump scam against his most loyal followers. It turns out that the bill Josh Riley voted for rescinds an order developed through careful consideration over several years by the Treasury Department. That order simply states that brokers and middlemen who trade in cryptocurrencies, or companies that provide software that performs these same kind of cryptocurrency trades, must report the same information to the US Treasury Department that their equivalents in traditional securities trading already do.
Cryptocurrency dealers complained that this order was unfair, because it requires cryptocurrency trading firms to provide information that they do not routinely collect. However, the only reason that cryptocurrency firms don’t collect this information is that they have been evading existing federal laws and regulations for securities trading.
Essentially, the Treasury Department order merely directed cryptocurrency firms to obey the same reporting requirements that other securities trading firms already comply with.
These reporting requirements exist in order to protect the American people from money laundering, securities fraud, and other crimes.
When he voted for H.J. Res 25, Josh Riley voted to allow cryptocurrency firms to continue to evade consumer protections, criminal investigations, and tax obligations.
Josh Riley voted to help cryptocurrency con artists to avoid paying taxes, to protect cryptocurrency firm abuses against day-to-day traders, and to shield corrupt payments by cryptocurrency companies to elected officials, including members of Congress and the President of the United States.
Josh Riley voted to provide special protections that apply in a meaningful way only for the most wealthy traders of cryptocurrencies that are associated with criminal activities.
Before the House of Representatives voted on H.J. Res 25, U.S. Representative Lloyd Doggett rose to speak in opposition to the legislation. Congressman Doggett had this to say:
Mr. Speaker, brokers who sell stocks and mutual funds have long been required to file a report in January of each year on Form 1099. They send it to their customers. They send it to the Internal Revenue Service. Many honest taxpayers out there right now have been collecting their 1099s from a bank or a securities broker to attach when they pay their taxes.
Well-established crypto exchanges, like Coinbase and Binance, are required to do the same thing this year. Why is it that Republicans are coming here today and saying: We want these decentralized finance crypto exchanges to be exempt from what everyone else in the financial service industry does? The answer is two words.
The answer is the same answer as to why it is we are about to see a new spending bill approved tonight. It is the same answer as to why Re publicans are insistent on a reconciliation bill that will add literally trillions of dollars to our national debt as they boast about being fiscal conservatives who are cutting healthcare in this country. It is the same answer as to why Re publicans cannot find their tongue when Elon Musk goes rampaging through our civil service. The Presi dent is responsible for dismissing more veterans than any President in the his tory of the United States. It is the same answer that exists when the same rampage is undermining Social Security and the ability of the Social Security system to pay those checks that have been the lifeline for so many individuals who are seniors or individuals with disabilities.
The answer, in short, is: Donald Trump.
Shortly before he became President, Mr. Trump began raking in tens of mil lions of dollars in fees by launching his own meme coin, and the Trump family launched World Liberty Financial, which seeks to become a future decentralized finance. As usual, the Trumps don’t want to play by the rules that apply to mere commoners. King Trump, as he has de scribed himself, plays by different rules for the royalty. Of course, disclosure and transparency are an absolute anathema to this administration, for whom lies are the currency of the realm. Getting a special interest exemption from a pesky 1099 disclosure makes tax evasion and money laundering so much easier for the wealthy Republican do nors who have been using these decentralized exchanges. This bill, designed to exempt crypto fraud, is consistent with the sudden de cision last week of Trump’s SEC to halt prosecuting fraud against a Chinese businessman who, just coinciden tally, invested $75 million in the Trump family’s World Liberty Financial. In this administration, friends don’t prosecute friends, or certainly not friendly investors. Despite President Trump’s claim that he must launch a trade war and impose a 25 percent tax on Americans who purchase anything from Canada in order to stop the estimated fraction of 1 percent of the fentanyl that enters our country from that longtime ally, today’s bill opens the door to reward ing drug traffickers in fentanyl, co caine, and whatever, as well as terror ists.
My colleagues need not take my word for it. We can turn to a Republican, Senator BILL CASSIDY of Louisiana, who said: ‘‘Cryptocurrency has played an increasingly prominent role in the global fentanyl trade . . . both in terms of . . . manufacturing and traf ficking of fentanyl and in laundering drug cartels’ criminal proceeds.’’ He says: ‘‘This is particularly true of so-called ‘decentralized’ crypto ex changes,’’ for which this bill provides a totally unjustified special treatment. According to the nonpartisan FACT Coalition, cryptocurrency is becoming attractive to hostile actors like Hamas, who seek ways to sidestep sanctions. The risks are especially se vere with decentralized finance plat forms, which are enabled to operate outside the traditional regulatory oversight that applies to others. I further note that, when we talk about fiscal responsibility, this bill will add $4 billion to our national debt. Republicans can’t even question that. It is like the $8 billion in one of the gifts the majority gave to the oil in dustry last week. With $4 billion here, $8 billion there, and $4 trillion or so with the Republican tax bill to provide more tax breaks to people like Elon Musk and the people who were seated in the front row at the President’s inauguration, it adds up. Those Republicans who have been telling us that we have a great na tional security problem with our na tional debt are so concerned about it that they are going to add trillions of dollars more, and $4 billion is nothing to ignore, which this bill does and does not pay for. We should reject this new Trump spe cial interest legislation that will just result in more corruption in this ad ministration, a loophole that would be exploited by wealthy tax cheats, drug traffickers, and terrorist financiers, for which there is absolutely no reasonable justification.”
How could Josh Riley in good conscience vote for this corrupt legislation after hearing Congressman Doggett speak?
There are three possibilities:
Josh Riley was sloppy. Josh Riley didn’t bother to listen to the debate on the floor of the US House of Representatives before he voted for legislation. Josh Riley didn’t do the work to research this bill, and therefore didn’t understand what he was voting for.
Josh Riley was gullible. Josh Riley sincerely believed the hype and deception from cryptocurrency lobbyists, and wasn’t able to perceive the obvious corruption inherent in allowing the same cryptocurrency insiders who have been bribing government officials to continue to get away with it.
Josh Riley was corrupt. I don’t know if Josh Riley has investments in cryptocurrencies. I don’t know whether Josh Riley has taken money from cryptocurrency lobbyists. I don’t know if Josh Riley has been bribed by powerful cryptocurrency firms like Binance and Coinbase. With the amount of cryptocurrency sloshing around in Washington D.C., however, corruption is a possibility.
I hesitate to use the phrase “cryptocurrency industry” because there is no industry involved in cryptocurrency trading. However, if I were to use that phrase, I would use it while noting that the cryptocurrency “industry” spent more money on politicians in the 2024 campaign season than any other industry. How much was Josh Riley part of that trend? Josh Riley’s constituents deserve honest answers about this.
It’s telling to me that Josh Riley didn’t speak about his vote for this cryptocurrency bill in any of his text messages or email newsletters this month. He didn’t issue any press releases about this vote, either. That suggests that Josh Riley knows that voters in New York’s 19th congressional district would not approve of his vote to give special exemptions from the law to cryptocurrency trading companies.
Josh Riley loves to give speeches about how he is “fighting” for “working folks”. That’s exactly the opposite of what happened in his vote for H.J. Res 25, though. Working folks in Upstate New York are not heavily invested in cryptocurrencies. If they’re involved in cryptocurrencies at all, it’s as the victims of cryptocurrency scams run by the companies who lobbied in favor of this legislation.
This week, Josh Riley voted against the economic interests of the working people of Upstate New York. He put the economic privilege of scammers from Silicon Valley cryptocurrency firms first.
Josh Riley ought to be ashamed of himself.
