- Instead of taking a shotgun approach, focus on finding solutions to the risks associated with cryptocurrency.
In light of the FTX debacle, Senator Elizabeth Warren recently introduced a bill that requires the U.S. Treasury Secretary to establish a rule prohibiting financial institutions from dealing with self-custody wallets. Innovation in the United States is at risk due to Warren’s shotgun approach to regulation.
Thankfully, some lawmakers in the United States are aware of both cryptography and the principles of freedom upon which the country was established. As Rep Warren Davidson (R-OH) puts it, “to own and hold private property”, he knew it was only a matter of time before someone like Warren would attempt to force the Treasury Department to interfere with customers’ right to self-custody of their digital assets. To protect Americans’ right to privacy while dealing with crypto holdings, he proposed the “Keep Your Coins Act” in February of last year.
The bill forbids any federal agency from enacting a rule that would limit someone’s capacity to operate as a self-custodian and consequently their capacity to carry out peer-to-peer transactions without the requirement for a third-party intermediary such as FTX.
Davidson said after introducing the bill. “The federal government intends to impose more surveillance over American citizens as it seeks to further regulate the crypto environment.”.
The FTX collapse makes it very clear why self-custody ought to be safeguarded. By portraying FTX as a sizable financial institution with opulent sponsorships and spokespeople, Sam Bankman-Fried persuaded consumers to entrust their digital assets to the company. Satoshi Nakamoto, the creator of bitcoin, believed that blockchains are unreliable. Customers of FTX who moved their digital assets out of FTX and into their own self-custody wallets did not suffer financial losses as a result of the Bankman-fraud.
Elizabeth Warren claimed that the government should eventually forbid people from holding Bitcoin in their retirement accounts as a further acceptable response to the FTX collapse.
Warren and her two other Senate Democrats, Dick Durbin and Tina Smith called for a ban on consumers having the option to allocate bitcoin to their retirement plans in a letter to Fidelity Investments.
No one is being forced to invest retirement funds in bitcoin by Fidelity which just recently permitted consumers to allocate a portion of their contributions to Bitcoin. Instead, it only gives consumers the option to include bitcoin exposure with their stocks, bonds, precious metals, index funds, developing markets, and other risky and volatile investments.
Warren was seen as a champion of the people fighting the banking industry, the Wells Fargos, the Chases, and the HSBCs of the globe during the global financial crisis of 2008.
In a letter to Warren, Kadan Stadelmann said that “Your open hostility towards financial freedom violates American ideals and deprives consumers of their rights, leaving them defenseless against the financial scammers you claim to be fighting.”
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
