Records show one of United States President Joe Biden’s Senate closest allies placed a substantial financial wager against the country’s economy last month.
The latest development comes amidst mounting regulatory pressures on the cryptocurrency industry by the US regulatory watchdogs that have argued that the asset class poses a serious threat to the economy.
Shorting the US Economy
According to reports, Senator Thomas Carpel, a member of the Senate Finance Committee, revealed this week that his wife purchased up to $95,000 in shares of Ranger Equity Bear ETF and ProShares Short QQQ on July 13.These funds short stocks as a precautionary measure against economic downturns.
Notably, this isn’t the only time the Carpers made a comparable bearish bet on the economy. Reports suggest that they made a similar wager last year by acquiring up to $110,000 in Ranger Equity Bear ETC.
The bets stand in stark contrast to Carper’s comments on May 25th when he thanked the POTUS for a “resilient” economy that is “growing stronger every day.” Last year, the Senator even lauded Biden’s leadership for a “huge” increase in jobs in the US.
A sitting Congressman shorting the US economy did not sit well with many in the digital asset industry that have been at the receiving end of a hostile regulatory climate over several years.
Several crypto players took a jibe at the bets, especially since Carper had called Biden a “dear friend” earlier this year in a tweet that’s still pinned to his Twitter profile.
The Biden administration, on the other hand, has expressed concern over the turmoil in the cryptocurrency markets and the subsequent impact on average Americans’ financial health several times.
Carper’s office has previously downplayed the former military officer’s stock transactions, claiming that the family’s financial adviser “independently” conducts transactions.
Nevertheless, experts highlight that monitoring lawmakers’ investments for potential conflicts of interest is challenging because Capitol Hill rules 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 concerning 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.
Reform?
The Stop Trading on Congressional Knowledge (Stock) Act was passed in 2012 following several scandals of insider trading during the global financial crisis. The Act effectively banned lawmakers from trading based on “material, non-public information” extracted from their positions or obtained through their job, regardless of whether they utilize stocks, investment funds, or other means.
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.
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