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

And he is. A farmer and rancher himself, Lucas is a former House Agriculture Committee chairman and was responsible for the 2014 farm bill.

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

Lucas has been a member of what is now the House Financial Services Committee since shortly after he entered Congress in 1994 and is its longest-serving Republican. He also expects to return to the Agriculture Committee after a several-year hiatus.

Ag’s involvement in cryptocurrency might surprise some, but it oversees the Commodity Futures Trading Commission, or CFTC. The public most associates the CFTC with hog bellies and grain futures, but it also regulates complex financial instruments — which is what many consider cryptocurrency to be, Lucas said.

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

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

“It is the Wild West environment we’ve been working in that has given people who were good salesmen or slick con men, however you want to describe it, the ability to manipulate and secure massive resources,” Lucas said.

“That bubble has now burst,” he said. “If crypto is going to continue to exist, then it’s got to be regulated in a way that reflects — we can’t just have the Wild West any more.”

Lucas said some Democrats want to outlaw crypto altogether, while some Republicans “think this is the future of all currency transactions.”

Lucas said he’s somewhere in between but has been proactively cautioning constituents since last summer to invest in cryptocurrency only money they can afford to lose.

“As we saw with the FTX collapse in the last few days, even the most sophisticated, big-time investors and investment funds have been burned down,” Lucas said.

Incoming Financial Services Chairman Patrick McHenry of North Carolina, Lucas said, “is very focused that if we’re going to continue to have this stuff we have to have laws and regulations.”

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

FTX is an international cryptocurrency exchange that plunged into bankruptcy last month after reports that Bankman-Fried had overstated its value and perhaps looted its assets.

John Ray, the caretaker CEO of FTX, told a Financial Services Committee hearing on Tuesday that only about $1 billion of up to $7 billion invested in the company has been found.

Some of the money apparently went to members of Congress as campaign contributions. Lucas does not seem to have received any of it.

Lucas is scheduled 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 indicated that he believes that will happen.

Except for an obvious disdain for Bankman-Fried and a concern for investors, Lucas did not reveal 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 expect he’ll be a guest of the United States government for a long, long time.”

“I’m afraid there’s going to be a number of my constituents who have really had their retirement futures made a lot worse because of this guy.”