Details of Senator Elizabeth Warren’s proposed crypto regulation have emerged, and they are deeply unsettling.
The crypto-hating Democrat has unveiled her crypto law proposals. The fact that it has so many glaring flaws demonstrates that she has a superficial understanding of the underlying technology at best.
The legislation seeks to mandate that the Financial Crimes Enforcement Network provide regulations for digital assets. That is, she intends to regulate the sector and the asset class as if they were criminal organizations.
In order to “launder billions,” “evade sanctions,” and “finance terrorism,” “rogue nations,” “oligarchs,” and “drug lords” are turning to cryptocurrency.
That was the most recent outburst from the politician, who has shown his abject hatred for the crypto industry and its practitioners.
As written, the “Digital Asset Anti Money Laundering Act of 2022” would impose a plethora of restrictions that would effectively wipe out all financial privacy. Warren wants to classify wallets, nodes, and validators as “money service businesses,” demonstrating a staggering lack of understanding of the technology.
In the blockchain network, validators and nodes are not physical entities but rather pieces of software that verify transactions.
In addition, they would have to become officially recognized as financial institutions, just like banks and other conventional financial institutions. Consequently, they would have to track and register each individual who makes use of their program.
Without a warrant, government request, or probable cause, they would also be required to report on their users. According to Elizabeth Warren, these “financial institutions” should be prohibited from engaging in any business that requires the use of anonymizing technologies or networks.
The CoinCenter, a research and advocacy organization in Washington, DC, has stated that the bill does nothing to protect users from the next FTX and may even increase the likelihood of such an event. Furthermore, it added that it is intended to forbid Americans from having any technological guarantees of personal privacy.
“The bill has been purposefully drafted to make permissionless blockchains inaccessible to Americans by requiring all validators and developers of these networks to gate and monitor their infrastructure.”
Ryan Sean Adams, an industry expert, called it the most “significant attack on digital freedom” he’d ever seen. Furthermore, he stated that the bill intends to outlaw financial privacy and turn America into a full-fledged surveillance state, adding, “Instead of doubling down on the values of our constitution, we’re fast-tracking China into a half-assed digital authoritarianism.”
Will Clemente, co-founder of Reflexivity Research, added, “Elizabeth Warren is so uneducated on the subject that she doesn’t realize the FTX blowup is the same as fractional reserve bank blowups that have been occurring for centuries.”
The FTX debacle exemplifies why Bitcoin was created: to eliminate trust, he added.
