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US Senator’s Harsh Critique Targets Blockchain Association
- US Senator Elizabeth Warren has accused US Blockchain Association (BA) of abusing lobbying to block regulation in a scathing letter.
- BA rebukes criticism and crypto industry expresses its anger.
US Senator and the lead author of the proposed Digital Asset Anti-Money Laundering Act, Elizabeth Warren, has written to the Blockchain Association (BA) accusing it of abusing the “revolving door” political lobbying system in an attempt to fight regulation of the crypto industry in the US.
The letter also called on the BA to disclose all staff with military or government backgrounds along with additional information such as their salaries and officials they’ve met with.
This letter follows an earlier letter signed by a large number of former military and government employees the BA sent to the Senate Banking Committee and the House Financial Committee on November 15 which pushed back on the political and media narrative that digital assets had been a crucial source of funding for Hamas’ attack on Israel on October 7th.
Warren Says Crypto Industry Trying To Block Money Laundering Laws, Cites Politico Report
Senator Warren seems to have been motivated to write the letter partly by a Politico report published November 22 that claimed the crypto industry “is increasingly flexing a not-so secret weapon: a small army of former defence, national security and law enforcement officials.”
The report, which Senator Warren’s letter quotes at length, claimed that this “small army” is being deployed to block crypto regulation aimed at stopping the flow of digital assets to terrorist and criminal organisations around the world.
Senator Warren says the practice of hiring people with government or military backgrounds by the crypto industry, which she labels as the “abuse of the revolving door” is “appalling”. She further claims the practice shows:
“…That the crypto industry is spending millions to give itself a veneer of legitimacy while fighting tooth and nail to stonewall common sense rules designed to restrict the use of crypto for terror financing – rules that could cut into crypto company profits.”
US Senator Elizabeth Warren After her scathing attack on the crypto industry, Senator Warren then demands the BA disclose an enormous amount of confidential information about its employees with military or government backgrounds, including:
- Their past roles
- Their current salary
- A summary of their activities
- Whether they’re registered lobbyists
- Any legislation they’ve been involved in
- A list of all Biden administration officials they’ve met with
- A list of any other officials they’ve met with
- Any federal experience with crypto and terrorist financing
- If anyone who signed the BA’s November 15 letter are paid by any other crypto firms
- Whether the BA was in contact with any of its current employees while they were still working for the government.
Crypto Industry Responds
Leaders within the crypto industry were quick to respond to the letter—unsurprisingly they weren’t impressed. The CEO of the Blockchain Association, Kristin Smith, posted a thread on X suggesting Senator Warren should worry about the people actually committing crimes, not the people trying to work with government to improve the industry:
As Americans, we all share the common goal of fighting terrorism and protecting our national security. Sen. Warren should focus her efforts on the perpetrators, not those working hand-in-hand with U.S. law enforcement to catch bad actors.
CEO of the Blockchain Association, Kristin Smith She went on to lament Senator Warren’s continued attempts to discredit the entire crypto industry:
Our community – those that build the technology and those that use it – is strong and passionate and includes people of diverse backgrounds and experiences. Today’s letter is yet another disappointing step taken by Sen. Warren to discredit our industry and the individuals who are working to build a more inclusive financial system and user-focused internet.
CEO of the Blockchain Association, Kristin Smith CTO at Ripple, David Schwartz, simply posted “This makes me angry” along with a screenshot of the letter highlighting Warren’s accusation that the crypto industry is focused on undermining anti-money laundering legislation.
Stuart Alderoty, Ripple’s Chief Legal Officer, suggested Warren’s letter breached principles of the US Constitution by seemingly questioning the crypto industry’s right to “petition the government”.
Crypto Anti-Money Laundering Bill Co-Author Says Bill Written By Banks
In another sign of US legislators hostility to crypto, Senator Roger Marshall, one of the co-sponsors of the Digital Asset Anti-Money Laundering Act, claimed the first thing he and Senator Warren did when they started writing the bill was seek input from the banks:
The first thing we did is we went to the American Bankers Association and said ‘help us craft this’.
US Senator Roger Marshall Worryingly, he also seemed to endorse the view that the only use case for cryptocurrencies is crime, saying “I don’t know if you saw Senator Warren’s hearing with Jamie Diamond yesterday, Mr. Diamond said basically in his opinion crypto is only a tool for criminals…That’s all I know about crypto.”
Author
Jody McDonald
Jody is a Brisbane-based freelance writer who specialises in writing about business, technology, and the future of work.
