Sen. Elizabeth Warren, a Democrat from Massachusetts, stepped up her criticism of the cryptocurrency sector in recent letters to trade associations and Coinbase.
She accused industry groups of “flexing a not-so secret weapon” in a letter to the cryptocurrency advocacy group Coin Center. She claimed that these groups had hired former defense and law enforcement officials in an apparent attempt to undermine Congressional efforts to address the alleged role that cryptocurrency has played in financing terrorist groups, including Hamas.
“This abuse of the revolving door is appalling, revealing that the crypto industry is spending millions to give itself a veneer of legitimacy while fighting tooth and nail to stonewall common sense rules designed to restrict the use of crypto for terror financing – rules that could cut into crypto company profits,” Warren wrote in a letter to Coin Center on on Monday. Politico claims that letters were also issued to Coinbase and the Blockchain Association.
Warren has made a strong case for the potential use of cryptocurrency to support terrorist groups like Hamas, which attacked Israel in October. Warren and other politicians have frequently referenced a Wall Street Journal article claiming that cryptocurrency was utilized by Hamas and other violent organizations as a means of funding tool prior to the Israeli assaults. The blockchain forensics company Elliptic provided the data for that article; however, the company has now claimed that the numbers were incorrect.
Jerry Brito, Executive Director of Coin Center, refuted Warren’s claim on Tuesday, referring to it as a “bullying publicity stunt” on X.
“Engaging like-minded experts to advocate against legislative proposals that one sincerely believes are unconstitutional and detrimental to the nation’s welfare does not constitute ‘undermining bipartisan efforts in Congress,'” said Brito. It is actually the use of one’s fundamental right to petition the government and form free associations. Everyone has the right to do so, and nobody need to feel bad about it.”
lobbying for cryptocurrencies
Consumer advocacy group Public Citizen reported last year that with the assistance of “revolving door lobbyists,” which included former chairs of the Securities and Exchange Commission and the Commodities Futures Trading Commission, as well as officials from the Department of Homeland Security and the Department of Justice, lobbying spending on cryptocurrency has nearly quadrupled since 2018.
In her correspondence, Warren requested details regarding the number of ex-service members and members of Congress who are employed by the three crypto organizations, as well as their job titles. Warren then inquired if the organizations had “a code of ethics that restricts contacts with active government officials about future employment, or restricts the activities of former government employees that are now working for your organization or on its behalf.”
She needs responses by January 14th.
Warren has expressed worries in the past about hiring crypto people. Warren and other senators questioned finance regulators in letters they issued in 2022 about their plans to end the agency-to-crypto industry backdoor.