Dear Senator Warren,
The FTX uproar has breathed new life into crypto regulatory efforts. Politicians pouched the opportunity, including you. Your bill is recent introduced require the Secretary of the US Treasury to create rules that do not allow financial institutions from transactions with self-sustainable wallets, the FTX debacle. This is an inappropriate response to the failure of a centralized entity that has been regulated by the government. Your shotgun approach to regulation is dangerous to innovation in the United States, and especially Main Street.
Fortunately, some US lawmakers understand not only crypto but also the foundation of freedom that the United States was founded on. Representative Warren Davidson (R-OH) knows it’s only a matter of time before people like you will try to pressure the Treasury Department to interfere with consumers’ rights to hold digital assets – as Rep. Davidson put it, “Own and own personal property.” Therefore, he introduced last February the Keep Your Coins Act, which was designed to protect the privacy rights of Americans when dealing with crypto assets.
The bill would prohibit federal agencies from enacting rules that would undermine people’s ability to act as their own custodians, and thus their ability to conduct peer-to-peer transactions without the need for a third-party intermediary, such as FTX. .
“As the federal government seeks more regulation of the crypto ecosystem, it seeks to impose more oversight on Americans,” Rep. Davidson said after introducing the bill. “It is important that we maintain the attributes of cash transactions by protecting the nature of cash without permission. No third party is required for two people (or companies) to use money as a means of exchange, store value, and account records. This bill ensures that individuals will have the ability to transact without intermediaries.
At FTX collapsed make it clear why sole custody should be protected. Sam Bankman-Fried convinced people to send their digital assets to FTX by positioning the company as a large financial institution with lavish sponsors and spokespeople. The Bankman-Fried illusion planted around FTX promotes trust. Blockchain, in the vision of Bitcoin creator Satoshi Nakamoto, is not trustworthy.
Bankman-Fried takes customers’ digital assets in FTX and puts them under control Alameda Research, the hedge fund he founded is the trading arm of FTX. They created FTT, the native token of FTX, to be used as collateral for the loan from FTX to Alameda. He used Alameda’s assets to an irresponsible level. Bankman-Fried conduct is an old criminality that appears over and over in traditional finance, and is made possible by the fact that people send money to act as third-party intermediaries. To then send a bill on the consequences of managing self-detention makes little logical sense.
FTX customers who transfer digital assets from FTX to their own custody wallets do not lose money to the Bankman-Fried scam. You want to remove the consumer only voice protection against the failure of third-party intermediaries.
FTX is the opposite of Nakamoto’s blockchain and the original concept of cryptocurrency. “Commerce on the Internet has become almost dependent on financial institutions that are trusted third parties to process electronic payments,” reading The opening lines of the white paper written by the pseudonymous inventor of Bitcoin. “While the system works well for most transactions, it still suffers from the weaknesses of a trust-based model.” Bankman-Fried exploits flaws in traditional financial systems, not blockchain.
You also argue that another appropriate response to the FTX collapse would be, ultimately, for the government to stop people from having Bitcoin in their retirement accounts. In a letter to Fidelity Investments, you and two fellow Senate Democrats — Sens. Dick Durbin (D-Ill.) and Tina Smith (D-Minn.) — argue for a moratorium on people having the option to allocate Bitcoins to their retirement accounts.
Fidelity, which only recently allowed customers to allocate part of their contributions to Bitcoin, does not force people to put their retirement funds into bitcoin. Instead, it simply gives you the option to increase your exposure to Bitcoin alongside stocks, bonds, precious metals, index funds, emerging markets, and other sometimes risky and volatile investments. choice. That’s what Bitcoin and other cryptocurrencies are all about. Preventing people from having Bitcoin in their pension fund will not stop FTX in the future.
During the 2008 financial crisis, you looked at as a champion of the people against the banking system, against the Wells Fargos, against the Chases, against the HSBCs of the world. Bitcoin and other cryptocurrencies are the solution to the predatory ways of banking oligopolies. This is one way for people to get out of the banking system, take custody of their own money, and not worry about fees and banks taking advantage of them.
Your open hostility to financial freedom goes against American values while also harming consumers, so it can be blamed on the financial fraudsters you want to fight. A more constitutional approach is likely to promote innovation. The US state of Wyoming is world famous for its distribution scalable blockchain regulations. Maybe the rest of America — as well as regulators elsewhere in the world, including Europe and Asia — can learn from the so-called “Cowboy States.”