As a bit of a libertarian it’s easy to feel like the crypto market is under attack from all sides. From big banks to government regulators, it seems like everyone wants to shut down this innovative new technology. But the latest threat comes from an unlikely source: US Senator Elizabeth Warren.
Warren has been a vocal critic of bitcoin and other cryptocurrencies for years. She’s introduced a slew of anti-crypto bills in Congress and has been working to build an “anti-crypto army” as part of her re-election campaign. But what does this mean for those of us who believe in the power of individual liberty and decentralized finance?
Just recently the Digital Asset Anti-Money Laundering Act has been reintroduced by Senators Elizabeth Warren and Roger Marshall. The aim of the legislation is to close the loopholes that are currently being exploited by bad actors, terrorists, and rogue states in order to launder money through crypto transactions. This move may indicate a renewed focus on regulating the crypto industry.
If passed, the act would require crypto exchanges and other virtual asset service providers to comply with the Bank Secrecy Act and other anti-money laundering laws. Additionally, the act would create a new framework for regulating digital assets and require the Financial Crimes Enforcement Network to establish rules for detecting and reporting suspicious activities involving digital assets.
The bill would also expand anti-money laundering reporting requirements to include U.S. persons who transact $10,000 or more in digital assets using an offshore account. It would also require the Treasury Department to conduct anti-money laundering compliance examinations for money service businesses, which includes the registration that large U.S. crypto companies fall under. Overall, the reintroduction of the Digital Asset Anti-Money Laundering Act is a step towards increasing transparency and accountability within the crypto industry.
In response to this regulatory assault, it’s important to understand where Warren is coming from. She sees crypto as a threat to national security, citing concerns about money laundering and terrorism financing. She’s also worried about the environmental impact of crypto mining and the potential for financial instability if the crypto market were to crash. Perhaps Warren thinks the crypto industry is some how right wing? Certainly the recent attacks in the US have led some people to re-consider voting Democrat again.
From an international perspective however, if say you are in Turkey or Argentina (where it’s reported P2P Bitcoin volumes in the country are on track to hit a new high for Q1 2023) having a stable source of income and savings that cannot be targeted by the government or undermined by inflation is simply common sense. In India the right wing Modi-led government is not only hard on crypto, but using its presidency of the G-20 to advance a government-centric idea of crypto, heavy on CBDCs and taxation, light on individual rights and its anti-censorship properties. In comparison in the Western economies the crypto market through the bull market has often appeared to be more about trading for a quick profit, dramatized by the fraudulent activities of Terra and FTX; so not surprisingly it’s attracted a right wing anarcho label. But also there’s a generational difference, where traditional political labels of right and left seem less rigid than with GenX and older.
Perhaps a better question is whether the crypto market is inherently disruptive as it’s become obvious how dependent the crypto bull market has been on the Covid economic stimulus and subsequent interest rate hikes. Certainly the recent moves in the US to clamp down on crypto from action against staking with Kraken to SEC action against Paxos and BUSD, suggests it is threatening to the status quo. It’s not a black and white picture though, it’s more complex than left vs right. For instance, while Senator Elizabeth Warren rails against a SEC in the Trump era as lax on crypto regulations, her views are surprisingly close to Trump’s, who tweeted his personal hostility to crypto in July 2019. This is despite the majority of the Republican Party being pro-crypto.
I voted for democrats: you’ve now lost my vote. I also donated to both Democratic & Republican Party members who were learning about Bitcoin & crypto.
I’m pausing all political donations to democrats until they sort this with @SenWarren. Others in our industry should do the same
— muneeb.btc (@muneeb) March 30, 2023
Also it’s a mistake to think personal autonomy and decreased government control is a preserve of right-wing ideology. That said, too often left positions tend to be top-down models of policy and practice rather than actually involving people in the process. In contrast, the libertarian approach is actually harking back to pre-welfare state forms of self-organization such as cooperatives. Similarly, today’s crypto communities can be seen as forms for mutual learning and empowerment, members helping each other rather than dog-eat-dog anarcho capitalism. However, as recent Uniswap governance issues involving top VC a16z show, the decentralization inherent in the code doesn’t automatically extend to who has the power to run a crypto platform.
The current attack on crypto users and startups and its banking allies goes back to the original Operation Chokepoint, believed to have started with the Consumer Financial Protection Bureau (CFPB) proposed by Warren in 2007. But it’s not just Warren, the US Democratic Party is largely anti-crypto in outlook. This current regulatory and legislative moves however only really gained momentum with the collapse of FTX/Almaeda in November 2022, because of its close partnership with Silvergate Bank and no doubt due to the media coverage of the collapse.
Speaking recently to the American Economic Liberties Project Warren gave a number of well intentioned reasons why crypto was to be attacked. Firstly it’s bad for black investors and the ‘unbanked’. Plus, that crypto mining is polluting and driving up people’s energy costs. But to really understand Warren’s political drive you need to consider what she sees as the national security issues. It supports drug traffickers and rogue states. And it’s a threat to banking stability. Never mind that the evidence suggests the use of crypto is relatively minor, and due to its transparent nature can actually assist authorities in tackling criminality.
And while Warren’s concerns are valid, they don’t tell the whole story. Yes, there are bad actors in the crypto market, just as there are in any other financial system. But the vast majority of crypto users are law-abiding citizens who simply want more control over their money and the ability to transact without intermediaries.
What’s more, the environmental impact of crypto mining is often overstated. While it’s true that mining requires a lot of energy, many crypto projects are working to develop more sustainable mining practices. And when it comes to financial stability, it’s worth noting that the current banking system is hardly a paragon of stability.
So what can we do about Warren’s anti-crypto crusade? For starters, we need to educate ourselves and others about the benefits of crypto. We need to show that crypto is about more than just speculation and get-rich-quick schemes. It’s about financial freedom and the ability to transact without permission.
It’s often stated that providing financial services to underbanked populations is a progressive cause as cryptocurrencies can increase ‘financial inclusion’ by giving people who do not have access to normal banking services the means to save and send money. Certainly one of the benefits of El Salvador adopting Bitcoin was that it allowed people working in the US to send money home a lot cheaper, and more directly. The use of Bitcoin has also allowed women in Afghanistan, made unemployed when the Taliban came to power, to access much needed funds.In principle blockchain-based technology can be used to individuals to exchange goods and services directly, without the need for intermediaries.
The problem is like a lot of things in our techno-obsessed world, the reality is that for the average person a lot of crypto is pretty complicated to get your head around. Even top crypto folks have been hacked, to put another way! Where the crypto market has made the jump to mass appeal has been with blockchain gaming, for example helping Filipinos making ends meet playing Axie Infinity during the COVID pandemic. But after the bull market and the play-to-earn hype has died off, it’s clear the case for play-to-earn games as anything more substantial to people on minimum income is less apparent.
Perhaps more persuasive in terms of a libertarian point of view is the ideal of self-sovereignty and censorship resistance. How blockchain-based systems can allow individuals to control their personal data and determine who has access to it, challenging the power of large corporations and governments that might abuse their access to personal data. Such as last year’s use of NFTs highlight Shanghai’s struggles amid the harsh lockdown in China.
We also need to support crypto-friendly politicians who are willing to stand up to Warren and others who would seek to regulate the market out of existence. This means getting involved in local politics, supporting candidates who share our values, and making our voices heard in Congress.
Finally, we need to keep innovating. The crypto market is constantly evolving, and there are always new opportunities for those who are willing to take risks and think outside the box. Whether it’s developing new technologies or creating decentralized financial products, we need to keep pushing the boundaries of what’s possible in the world of crypto.
In conclusion, Elizabeth Warren’s anti-crypto army is a threat to our liberty and our financial future. But it’s not an insurmountable one. By educating ourselves, supporting crypto-friendly politicians, and continuing to innovate, we can ensure that the crypto market remains a vibrant and vital part of the global economy for years to come.
- Coinbase CEO, Bryan Armstrong, has launched a campaign for better crypto regulation in the US. He has created a “Stand With Crypto” NFT on the Zora marketplace to symbolize unity in the crypto community and urge US authorities to establish clear rules for the industry.If you want to show your support you the NFT can be minted for free on the Zora platform, and added to your Twitter profile.
I just minted Stand with Crypto https://t.co/4T0OWbpCCf
— Brian Armstrong 🛡️ (@brian_armstrong) April 25, 2023
 Elizabeth Warren Is Building An ‘Anti-Crypto Army’—Feeding Serious U.S. Bitcoin Ban Warnings, by Billy Bambrough, Forbes, Mar 30, 2023.
 SEC Crypto Exchange Letter from Elizabeth Warren to Gary Gensler, July 7, 2021.
 SEC chief doubles down on crypto crackdown, The Hill, April 18, 2023.
 Elizabeth Warren Does Not Speak for the Left on Crypto, Josh Adams, BeInCrypto, Feb 20, 2023.
 Finding financial freedom in Afghanistan, Alex Gladstein, Bitcoin Magazine, Aug 26, 2021.
 NFTs preserve Shanghai’s Covid-19 lockdown record from China censorship, South China Morning Post/Reuters, May 4, 2022.
 Operation Choke Point 2.0: The Federal Bank Regulators Come For Crypto,Cooper & Kirk Lawyers, Mar 24, 2023.
 Operation Choke Point 2.0 Is Underway, And Crypto Is In Its Crosshairs, Nic Carter, Feb 9, 2023.
 Hear me discuss the crypto market and the SEC with Jared Busby, on The Crypto Cave, Feb 27, 2023.
 Unmasking the Crypto Crackdown: Operation Chokepoint 2.0 Revealed, Toby Fan, Web3 Strategist @ LunarCrush, April 24, 2023. Includes a comprehensive list of resources and a detailed timeline of supporting evidence.
Note to reader regarding AI assistance:
Article updated on 11 May 2023 with co-input from ChatGPT, and Bard.