Senator Elizabeth Warren’s Crypto Crackdown: Risks for America
- Instead of taking a shotgun approach, focus on finding solutions to the risks associated with cryptocurrency.
In light of the FTX debacle, Senator Elizabeth Warren recently introduced a bill requiring the US Treasury Secretary to establish a rule prohibiting financial institutions from dealing with self-custody portfolios. Innovation in the US is at risk due to Warren’s approach to regulation.
Thankfully, some lawmakers in the United States are aware of both cryptography and the principles of freedom on which the country was founded. As Rep. Warren Davidson (R-OH) puts it, “owning and holding private property,” he knew it was only a matter of time before someone like Warren would attempt to force the Treasury Department to interfere with customers’ car entitlements – custody of your digital resources. To protect Americans’ right to privacy as they deal with cryptocurrency holdings, he proposed the “Keep Your Coins Act” in February of last year.
The bill prohibits any federal agency from enacting a rule that limits someone’s ability to operate as a self-custodian and thereby their ability to conduct peer-to-peer transactions without the need for a third-party intermediary such as FTX.
Davidson said after introducing the bill. “The federal government intends to impose increased surveillance on American citizens as it seeks to further regulate the crypto environment.”
The collapse of FTX makes it very clear why self-custody should be safeguarded. Describing FTX as a sizable financial institution with opulent sponsorships and spokespeople, Sam Bankman-Fried convinced consumers to entrust their digital assets to the firm. Satoshi Nakamoto, the creator of bitcoin, believed that blockchains were unreliable. FTX clients who have moved their digital assets out of FTX and into their own self-custody wallets have not suffered any financial loss due to Bankman’s fraud.
Elizabeth Warren said the government should eventually ban people from holding Bitcoin in their retirement accounts as another acceptable response to the FTX crash.
Warren and his two other Democratic senators, Dick Durbin and Tina Smith, called for a ban on consumers having the ability to allocate bitcoin to their retirement plans in a letter to Fidelity Investments.
No one is forced to invest pension funds in bitcoin by Fidelity which just recently allowed consumers to put a portion of their contributions into Bitcoin. Instead, it only offers consumers the option to include bitcoin exposure with their stocks, bonds, precious metals, index funds, developing markets, and other risky and volatile investments.
Warren has been seen as an advocate for the people fighting the banking sector, the Wells Fargos, the Chases and the HSBCs of the world during the 2008 global financial crisis.
In a letter to Warren, Kadan Stadelmann said that “your open hostility to financial freedom violates American ideals and disenfranchises consumers, leaving them defenseless against the financial fraudsters you claim to be fighting.”