Elizabeth Warren, a United States Senator known for her strong opposition to the blockchain industry, continues to face criticism for her stance on cryptocurrencies. In February, a group of military and national security professionals, in collaboration with the Blockchain Association, expressed concerns about Warren’s proposed crypto legislation. They believe that her Anti-Money Laundering bill could impede the development of blockchain technology in the US if passed. In a letter titled “Enacting Proposed Legislation that Threatens Digital Asset Development,” 80 signatories argued that Warren’s bill “jeopardizes our nation’s strategic advantage, puts tens of thousands of American jobs at risk, and has little impact on the illicit actors it aims to target.”
Cointelegraph spoke with Kristen Smith, CEO of the Blockchain Association, to get an update on the situation since their intervention in February. Smith stated, “The letter we sent to Congress on Feb. 13, signed by former military and national security experts, has received strong support from industry leaders and key allies in Congress.”
Despite the criticism, Warren continues to advocate for anti-crypto policies. In a Bloomberg interview on February 27, she claimed that she wants to collaborate with the industry while simultaneously criticizing it. She said, “I want to work with the industry. What I don’t understand is why the industry seems to believe that they can only survive if there’s room for drug traffickers, human traffickers, terrorists, ransomware scammers, and consumer scammers.”
Warren also raised concerns about nuclear weapons and rogue nations, stating that North Korea finances about half of its nuclear missile program with cryptocurrencies. However, her tendency to associate the crypto industry with criminal activities has not gained her any support from the blockchain community.
Danny Lim, a core contributor at decentralized exchange MarginX, believes that Warren’s bill is a futile effort. He said, “The Elizabeth Warren crypto bill is an example of a legislative endeavor that puts in 1,000% effort to achieve a 1% outcome.”
Lim argues that Warren’s mistake lies in applying regulations designed for traditional finance to the crypto industry. He believes that traditional banking methods for monitoring and tracing may not be effective in the crypto space. Instead, he suggests exploring crypto-centric solutions that allow for a meaningful convergence of traditional finance and decentralized finance. Lim added that imposing generic travel rules and mandatory Know Your Customer (KYC) requirements for on-chain transactions does not sit well with crypto users and the industry as a whole.
Zac Cheah, co-founder and CEO of Pundi X, a blockchain-based point-of-sale solution, shares Lim’s views. He believes that simply applying traditional banking regulations to digital assets without adjustments could hinder innovation. Cheah emphasizes the need for regulations that effectively combat money laundering while also accommodating the unique characteristics of digital assets. He concludes that a regulatory approach is needed that fosters innovation and protects the financial system from illicit activities.
Warren now faces a new threat to her power from within the crypto industry. Lawyer and XRP advocate John Deaton recently announced his intention to run for Senate in Massachusetts, where Warren holds her seat. Deaton’s campaign has already received support from prominent figures in the cryptocurrency community, such as Cardano founder Charles Hoskinson. Deaton is known for representing the interests of XRP holders against the US Securities and Exchange Commission (SEC), and his campaign poses a potential challenge to Warren’s incumbency.
The arrival of crypto as a political force is evident with Deaton’s candidacy. As Kristen Smith of the Blockchain Association notes, there is an increasing number of pro-crypto candidates entering electoral races at various levels of government. This serves as a reminder for those who take an anti-crypto stance to reconsider their position.