A group of technology experts is trying to warn the government of the dangers of the crypto industry. In a letter to U.S. policy makers, 26 computer scientists and engineers called on lawmakers to block efforts to create a ‘regulatory safe haven’ for cryptocurrency. They want leaders in Washington to instead focus on what they’re calling ‘responsible fintech policy.’
“The claims that the blockchain advocates make are not true,” Harvard professor Bruce Schneier, a member of the group behind the recent warning against crypto, told the Financial Times. “It’s not secure, it’s not decentralized. Any system where you forget your password and you lose your life savings is not a safe system.”
The letter calls on lawmakers to resist lobbying efforts by advocates of the crypto industry who don’t want the government to regulate cryptocurrency. Lobbying for crypto has in fact bolstered up in the past couple of years, with spending on crypto lobbying to influence cryptocurrency policy in Washington quadrupling since 2018, according to an analysis by Public Citizen. Stakeholders from the industry have spent about $US4.4 ($6) million on federal lobbying in the U.S. in the first quarter of this year, according to The Block, with the largest U.S. cryptocurrency exchange company Coinbase spending $US760,000 ($1,055,032) on lobbying alone during that period.
As a result, some are worried that the industry will get to enjoy unwarranted freedoms as far as regulation goes. “We urge you to resist pressure from digital asset industry financiers, lobbyists, and boosters to create a regulatory safe haven for these risky, flawed, and unproven digital financial instruments,” the recently drafted letter read.
The letter was addressed to leaders in both the House and Senate and calls on support from both parties. It comes at a time of increased concern following the crash of stablecoin TerraUSD. Although the concerns expressed in the letter are not novel, it does mark the first concentrated, more organised effort to counter the crypto industry.