Web2 Pundits Lobby Washington Against Crypto Influence

A group of 26 technologists, including some of crypto’s most fervent critics, has sent a lobbying letter to U.S. lawmakers urging them “resist pressure” from crypto financiers and lobbyists to create a regulatory safe haven for digital assets.

Tech Experts Counter-Lobby Crypto

A group of well-known technology pundits and academics has sent a letter to U.S. lawmakers in the first organized attempt to counter-lobby the crypto industry in Washington. 

The letter, signed by 26 people, including some of the crypto industry’s most vocal critics like software developer Stephen Diehl and Google Cloud engineer Kelsey Hightower, argues that blockchain technology has “few, if any, real-economy uses,” and that crypto assets have many negative externalities, including threats to national security, financial stability risks, and massive climate emissions. 

Addressed to both Senate majority and minority leaders as well as several other high-ranking U.S. Senate members, the letter read:

“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 and to instead take an approach that protects the public interest and ensures technology is deployed in genuine service to the needs of ordinary citizens.”

The signatories also argued that blockchain-based financial products are a “disaster for financial privacy,” except for those that are not, which in turn allegedly represent a “gift to money-launderers.” However, the allegations that crypto assets are disproportionately being used for illicit activities may not hold much merit when the relevant data is considered. According to a 2022 report by blockchain analytics firm Chainalysis, money laundering accounted for just 0.05% of all cryptocurrency transactions in 2021. For comparison, the UN Office of Drugs and Crime has estimated that between $800 billion and $2 trillion of fiat currency is laundered each year, tallying up as high as 5% of global GDP.

Diehl, one of the most ardent crypto critics on Twitter, reportedly told the Financial Times that the letter is about “counter-lobbying” the crypto industry’s people that “say what they want to the politicians.” Former Microsoft engineer Miguel de Icaza added that the crypto industry is “wasting millions of dollars’ worth of equipment because we’ve decided that we don’t trust the banking system.”

According to a March Bloomberg report, the crypto industry has spent around $9 million on lobbying in 2021, or more than triple what it did the previous year.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.