As supporters flocked to Washington to convince lawmakers of the benefits of cryptocurrencies, some engineers, including Harvard, aimed sharply in the opposite direction.
Cryptographic lobbying, led by industry tycoons such as Coinbase, Blockchain Association and Ripple Labs, has quadrupled from $ 2.2 million in 2018 to $ 9 million in 2021, according to a report by consumer advocacy group Public Citizen. That’s all. With the surge in lobbying, tech experts are alerting to what is known as a deep-seated problem in the industry.
On June 1, 26 engineers wrote to lawmakers urging the crypto industry to create stronger regulations. This is referred to by many critics as the “Wild West”, referring to the lack of structured regulation.
“Resisting pressure from financial firms, lobbyists and boosters in the digital asset industry to create a safe haven for these risky, flawed and unproven digital financial products. I recommend it, “says the letter. “We have a financial stake in the crypto asset industry that these technologies represent positive financial innovation and are somehow suitable for solving the financial problems faced by ordinary Americans. I strongly oppose stories supported by people with whom I have a relationship. “
With 1,500 signatures since then, the letter aims to act as a campaign against the millions of dollars that crypto proponents are pouring into the capital.
Bruce Schneier, an Internet and Society Fellow at Berkman Klein and a lecturer at Harvard Kennedy School, said that Bitcoin, the core technology behind many cryptocurrencies, has “no practical use.” It speeds up 500 years of financial fraud. It harms people and destroys the environment. “
“You can’t kill it because it’s international, and domestic law will just be ruined abroad,” he added. “But at least you can regulate it.”
As early as February 2019, Schneier, one of the main signatories of the letter, visited his personal blog to push back the view of blockchain as a technology that works independently of trust. Expressed concern about blockchain. Schneier argued that blockchain eliminates the need for traditional intermediaries, but users still rely on agents such as “minors” for the system to work.
The legislative agenda has long been a low priority, and lawmakers have begun to propose measures for the industry. On June 7, Senator Kirsten E. Gillibrand (DN.Y.) and Cynthia M. Lumis (R-Wy.) Submitted a bipartisan bill that clarified the framework for cryptocurrency regulation. The bill aims to create a clearer definition of digital assets, shifting most of the regulatory liability from the Securities and Exchange Commission to the smaller Commodity Futures Trading Commission.
Software engineer Stephen Diehl, who signed the June 1 letter, called the bill a “step back.”
“It creates a large cut in the American regulatory space, explicitly written by industry insiders, to minimize regulatory oversight of crypto assets,” Diehl said in an email. I am writing. “The current state of cryptography is bad, but this bill is even worse.”
The main signer, Molly White, said bipartisan law is “very friendly” to the crypto industry. White, a software engineer, is the creator of Web3 is Going Just Great, a project aimed at tracking Web3 corruption and malfunctions. This is a general term for the decentralized Internet based on blockchain technology.
“The crypto lobbying group, such people, is very pleased with it,” White said. “It was disappointing for many who wanted to see stronger regulations because they were more critical of cryptocurrencies and what they were proposing was fairly minimal, and we did. I think there is a risk of codifying a lot of really minimal regulations today. “
White said in his Twitter profile picture that a laser beam was being fired from her eyes. This is a popular internet symbol that shows support for the industry.
Senator Gillibrand and Senator Lumis’ offices did not respond to multiple requests for comment.
In recent years, cryptocurrencies have become a component of Harvard’s own investment portfolio. According to a CoinDesk report, Harvard management companies may have invested in Bitcoin as early as 2019, and Harvard-related investors purchased about $ 11.5 million worth of blockstack cryptocurrencies in April 2019. ..
David L. Yermack ’85, a professor at NYU Stern School of Business, said the Gillibrand-Lummis bill was a step in the right direction and called the SEC’s legal action against cryptocurrency companies “a grotesque form of over-regulation.” Stated. You may choose to diversify your portfolio to include cryptocurrencies.
“You’re really talking about the 1 percent order,” said Yermack, the former editor-in-chief of Crimson. “It really has to be held in proportion to its role in the investable world of the other assets out there.”
“You need to have a little like a toe in the water, but only a little,” he added. “I think it will take a long time before it becomes an important part of someone’s portfolio-at least anyone who is reasonable about this.”
The June 1st letter is not a lonely endeavor, but an organized representation of the alert that some signatories claim to have been ringing for years. Miguel de Icaza, the chief signator who co-founded the desktop environment GNOME with software company Xamarin, said it was “very difficult” to fight false information about the industry, and only some people were cryptocurrencies.
“This community was able to put veneers on top of series, mathematical proofs, and technobabble veneers, but it’s basically a rather complex set of operations,” deIcaza said. increase. “Technically, it’s rarely there.”
— Staff writer Isabella B. Cho can be contacted at firstname.lastname@example.org. Follow her on her Twitter @izbcho..