The U.S. Has Declared War on Crypto. Here's How We Fight Back
Recent developments in the U.S. show that regulators aren't holding back in their attack on crypto. Jacob Oliver explains why now is the time for the industry to unite and fight back.
- Recent moves from key U.S. regulators have signaled that they plan to set some crypto rules in court, and they are not pulling any punches.
- What was once a distant worry is now an immediate threat to large swaths of the space, and the time to act is now.
- This can only be accomplished by putting up a unified front, engaging the political system, and jockeying for a seat at the table.
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The U.S. government has taken a series of escalating actions over the last year to regulate the crypto industry, but as comprehensive legislation is still a long way off, regulators are turning to alternative means to shape the rules. It’s time for us to meet them on their playing field.
Crypto and the Enemy at the Gates
For years, advocates of decentralization—broadly conceived as both a technological innovation and a wider social aspiration that privileges the distribution of power—have argued that the distributed structure of blockchain technology renders it all but unstoppable, even to those who would willfully shut it down. But recent actions by a number of U.S. authorities have demonstrated that the federal government is all too willing to give it a try.
In August, the U.S. Treasury placed the privacy protocol Tornado Cash on its list of sanctioned entities, thereby forbidding its use to send or receive transactions for any reason. Doing so in violation of these sanctions is punishable by fines or imprisonment in the U.S. Last week, the SEC slipped language into a lawsuit against an ICO-era YouTuber that, were it to become precedent, would place all Ethereum transactions under U.S. jurisdiction. Also last week, the CFTC sued a DAO for the first time, arguing that any token holder who participated in governance voting could be culpable for the DAO’s actions. In fact, just yesterday, the CFTC served subpoenas to the entirety of Ooki DAO by submitting the papers through its online help chat box.
It’s not an exaggeration to say that this is the most aggressive line of “regulation by enforcement” that we’ve yet seen from U.S. authorities, and it feels like a warning shot right across the bow. The idea that decentralization immunizes a technology, practice, or any set of contractual arrangements from prohibition is simply not the case, and the U.S. government is trying to prove it.
We’ve known for a long time that there would come a day in which the semi-utopian, radically-libertarian ideology that drives so much of the cryptocurrency narrative would come face-to-face with stone-faced regulators. That day, frens, is here. We are about to find out, in a very tangible way, what happens when an unstoppable force meets an immovable object.
While it might be easy to panic at such alarming developments—especially if you’ve ever used a mixer protocol, or participated in a governance vote, or performed any other innocuous action that might soon be implicated—it has never been to anyone’s benefit to do so. And while the next impulse might be rage, that is neither helpful nor desirable in moments of crisis. Go scream at the sky to get it out of your system if you need to, but put it behind you as soon as possible. There is work to do.
It’s generally understood that the U.S. needs clear and comprehensive crypto legislation, but it’s also an undeniable fact that things move through Congress at a snail’s pace on the best of days. Last week’s actions make clear that federal regulators are not going to wait for new laws to be written before beginning to set some norms and precedents for themselves.
That means it’s time to do what Americans do when they decide to change the rules—it’s time to organize. The U.S. political system is an opaque, intransigent beast that favors the status quo and makes radical change very difficult. Nevertheless, it contains key mechanisms that allow determined movements to make a difference if they really, really put their minds to it. While we’ll be diving into these in greater detail in future pieces, here are a few ways to get things started:
Call your senator or congressperson. Believe it or not, this actually works—elected officials know that every person irritated enough to call and leave a message is just the tip of an angry iceberg that will vote against them in November. The higher the volume, the more effective it is—if you’re in a position to make it happen, consider setting up volunteer phone banks to make the calls en masse. It’s your right to complain to the government: use it.
Donate. Use your monetary power to contribute to the causes you believe in. Coin Center, for example, is at the forefront of advocating for crypto policy in Washington and identifying the key legal issues that need to be addressed. If you’re interested in your money being spent more directly on influencing legislators, consider a donation to American Blockchain PAC, a political action committee working to support crypto-friendly members of Congress and to identify the next generation of lawmakers.
Run for office. This is easier said than done, and it may seem like a pipe dream to many readers. But this is still a very real possibility, and one that will continue to open doors for crypto adoption. While it’s far too late to get involved in the 2022 midterms, those elections are taking place in just 40 days—the minute they are decided will be the minute that the 2024 season campaign season kicks off, so it’s time to think about them now.
Engage your community. Find fellow blockchain enthusiasts in your area, and make an effort to see them regularly. Search your socials for local meet-ups. Start one if you can’t find any. Have weighty conversations about blockchain and ask questions about what crypto policy should look like. Test your ideas against those of your peers. And above all, don’t go around making enemies when you could be making friends; we’re all going to need as many as we can get.
Keep your eye on the prize. When the rules are written, the crypto community will need strong advocates in the room where it happens. Ultimately, what we should want from this moment is not to dissuade lawmakers and regulators from making rules to govern the space. There is little chance of avoiding the government’s say-so in how the crypto world will operate, so let’s not waste time pretending we can. Instead, let’s focus on getting what will really benefit us in the long run—a seat at the table.
“’Tis not in numbers but in unity that our great strength lies: yet our present numbers are sufficient to repel the force of all the world.”—Thomas Paine
The most important word in the crypto space is “community.” It’s not a word that should be taken lightly; a community is marked by common interests, shared values, and the reciprocal feeling of support and fellowship among its members. As social primates at our core, our community is literally what we live for, and it is how we have always survived.
This is how crypto will survive, too. Any political movement is stronger when it is united, and make no mistake—this is a political movement. It must be, or it’s not going anywhere.
That starts with being good to one another and resisting the urge to take shots at our own. There is a lot of spite and bile thrown around Crypto Twitter, demonstrating that it is all too easy to let our specific ideological differences distract us from the common enterprises we could be working on. If we let that kind of thinking dominate our interactions with each other, we will only fracture into factions, each one less effective than the one it spun off from.
The most important thing we can do now is to dedicate ourselves to a sense of solidarity with each other, for we will undoubtedly need it. I, for one, am confident that we can do it, for never in my life have I worked in an industry so bull-headedly optimistic as this one. It is a palpably inspiring virtue, and if that can’t pull people together for a common cause, I doubt if anything can.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.