Sunday, January 29, 2023

Senator Warren’s Proposal Could Hurt Crypto, Not Russia

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Senator Warren’s proposal on crypto regulation could actually harm Crypto and not Russia as she intended. Hiding behind a nationalistic cause won’t make sanctioning validators less reckless or more effective so let’s read more in today’s latest cryptocurrency news.

The Democratic Senator Elizabeth Warren is often reserved with her distaste for the crypto industry. She noted that cryptocurrencies have severe volatility issues, fraudulent super coders, and bring a lot of environmental damage. She said:

“I won’t claim that her criticisms are entirely invalid (though I’ll cover those later), but they’ve become predictable to the point of comedy. Her reputation in the crypto community has entered the ranks of people like Peter Schiff, who have so firmly established themselves as crypto skeptics that they can no longer be expected to abandon the role. Not even when faced with logic or evidence.”

However, there are quite a few differences between her and Peter Schiff. He doubts crypto’s investment potential whereas Warren challenged the ethics of the technology. She often drafts Federal Laws for the US while Schiff does not. It doesn’t come as a surprise that Warren is behind one of the greatest and most unreasonable legislative threats in the industry.

Senator Warren’s proposal on crypto regulation might actually be more harmful to crypto itself than Russia. In the aftermath of Russia’s invasion of Ukraine, the US imposed new sanctions against the country but the regulators quickly started questioning if digital assets presented loopholes for the Russian oligarchs to bypass these sanctions.

EU Parliament Approved, legislation, crypto,

Warren was the first to address the issue with reports emerging that she drafted a bill to impose secondary sanctions on international crypto exchanges that will give them an ultimatum, not to transact with sanctioned people or forfeit access to the US market. Exchanges were long required to run background checks on their users to battle illicit finance and covering the remaining gaps in aML/KYC controls on international exchanges will help Block Russian access to the crypto markets.

The language reeked of the same issues with last year’s infrastructure bill over which the community caused an uproar. The bill imposed burdensome tax reporting requirements on the crypto brokers, defined as anyone that effectuates transfers of digital assets. The Coinbase CEO Brian Armstrong noted that at the time, those who effectuate transactions included everyone from miners to developers. At that time, there was a testimony affirming that the bill’s language was not meant to be applied in such a manner but Warren’s bill did name both validators and software devs as targets not for tax reporting but for the possible property sanctions from the governemnt.

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