Elizabeth Warren’s fight against Bitcoin

Massachusetts senator Elizabeth Warren is an advocate for regulating crypto currency, so much so she has gotten attention from the crypto industry .  The crypto industry is expected to spend 80 million in 2024 election on both sides of aisle.  Donald Trump even mentioned her in his speech at the Bitcoin conference.

They’re even spending some money on Warren’s opponent, John Deaton, in her upcoming primary election. Prominent crypto personalities have maxed out their donations to him.  The other competitor (but loser in the republican primary) was Ian Cain, a cofounder of a blockchain technology incubator 

But what is warrens issue with crypto. Well: directly from her website 

The lure of Crypto for some is that it provides anonymity for those who use it which makes it very difficult to track transactions. Because of this, it is commonly used for money laundering and could be, she argues, used by foreign nationals to make secret investments.   And according to her  and other media outlets, crypto has helped Russian, Iran get around economic sanctions and fund groups that “further” their interests

Another thing she is against is crypto farms.  She claims that many Crypto farms in US are owned by China.  And it has been proven crypto mining also causes harm to environment. -Bitcoin farms use enough energy to power 1.5 million homes.  This energy used contributes to CO2 emissions

Many countries have banned crypto mining so she says we need to get with the times.  In 2023 she introduced the anti money laundering act a bipartisan piece of legislation that would make crypto currency and other digital assets regulated the same as other physical assets like gold, private equity etc.  She sayy crypto gets special treatment when it really shouldn’t. 

The crypto community, known for being anti-government, anti-institution, was for the most part very against it.   Crypto Advocates say more regulation will hurt not help. They say its regulation that only lets people buy crypto on an exchange and not hold it in their personal wallets

A current rule says banks have to hold a dollar of capital for every dollar of digital assets because regulators say crypto is too risky to just hold outright.

They also say Regulation wont be enforced evenly.  Blockchain technology and protocols are already safer and more transparent than most financial companies.  They also say it would chase crypto activity offshore to places like Bahamas  

They say they don’t want money laundering or any of that either so instead they will work with regulators to explain blockchain technology 

My analysis is that Elizabeth Warren is using national security rhetoric to appeal to a bipartisan group, but I believe her real concern is consumer safety. Bitcoin advocates are already very anti-government they love decentralization all that so any talk of government involvement is going to freak them out.    But I think protections put in place to protect against scams are valid (I’m looking at you FTX).  There’s no doubt that when scammers/hackers ask for money, most of the time they ask for crypto

Perhaps those types will always find a way but at least efforts should be made to make it more difficult bad actors and protect consumers.  I see crypto, mostly bitcoin, not as the future of how we make transactions but as a sort of digital gold.  Another way that investors can speculate on future value.  And it should get the same treatment as gold and other assets. 

But the bipartisan support also had bipartisan dissent.  The bill did not pass as of October 2024 and both presidential candidates have put out an olive branch to the crypto industry.