Elizabeth Warren

Warren’s surveillance legislation is tailor-made to help big banks

Warren’s Digital Asset Anti-Money Laundering Act would shut crypto providers down, playing into the hands of the banking industry.

It seems that every time Massachusetts Senator Elizabeth Warren fails to get an anti-crypto bill passed, she introduces a new draft. She has the strategy of messaging bills — legislation introduced for the purposes of media attention and fundraising more than actual passage — down to a science.

Warren’s latest legislation, the Digital Asset Anti-Money Laundering Act, threatens to undermine crypto’s core principles of freedom and personal sovereignty. While Warren argues that her bill is necessary to combat illicit activities, a closer look reveals its potential to stifle innovation, endanger user privacy and play right into the hands of big banks.

The bill, co-sponsored by Kansas Senator Roger Marshall, is based on the premise that digital assets are increasingly being used for criminal activities such as money laundering, ransomware attacks and terrorist financing. While some bad actors exploit digital assets, the bill’s approach of treating all developers and wallet providers as potential criminals is not only impractical but also dangerous.

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Don’t panic: Only 11 of 330 Elizabeth Warren’s bills have ever passed

Support for the Digital Asset Anti-Money Laundering Act is growing in Congress, but most bills sponsored by legislators never become law.

Senator Elizabeth Warren’s crypto Anti-Money Laundering bill has been causing a massive stir in the crypto industry. But some have pointed out that the senator’s bills have a track record of not going anywhere.

According to data from the bill-tracking platform GovTrack, Warren has introduced 330 bills during her 11 years as a senator. Ten of them were eventually folded into other bills and only one rather obscure bill has ever been enacted as is.

This was the National POW/MIA Flag Act, which requires the prisoner of war/missing in action flag to be displayed alongside the United States flag on certain Federal property.

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Don’t panic: Only 11 of Elizabeth Warren’s 330 bills have ever passed

Support for the Digital Asset Anti-Money Laundering Act is growing in Congress, but most bills sponsored by legislators never become law.

United States Senator Elizabeth Warren’s crypto Anti-Money Laundering bill has been causing a massive stir in the crypto industry. But some have pointed out that the senator’s bills have a track record of not going anywhere.

According to data from the bill-tracking platform GovTrack, Warren has introduced 330 bills during her 11 years as a senator. Ten were eventually folded into other bills, and only one relatively obscure bill has ever been enacted.

This was the National POW/MIA Flag Act, which requires the prisoner of war/missing in action flag to be displayed alongside the U.S. flag on some federal property.

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Circle and BlockFi questioned on banking with SVB by Warren and AOC

Circle and BlockFi executives were questioned after the lawmakers accused Silicon Valley Bank of “coddling” and giving “white glove” treatment to its largest depositors.

Executives at the stablecoin issuer Circle and the bankrupt cryptocurrency lender BlockFi have been questioned by two members of Congress investigating the so-called “mutual backscratching arrangements” alleged to have taken place with the now-failed Silicon Valley Bank.

On April 9, letters from Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez (AOC) were sent to Circle, BlockFi and 12 other non-crypto tech firms asking a series of questions on each firm’s relationship with SVB.

The lawmakers stated that more needs to be known about SVB’s reported “coddling” and “white glove” treatment towards its largest depositors in order to understand if these firms played a role in SVB’s collapse.

Jeremy Allaire and Zac Prince, the respective chief executives of Circle and BlockFi, were questioned on the length of their financial relationships with SVB and t amounts deposited with the bank, along with what “agreements” were made between their firms.

Senator Elizabeth Warren and Representative Alexandra Ocasio-Cortez’s letter to Circle CEO Jeremy Allaire. Source: U.S. Senate

In addition, the pair wanted to know if SVB offered “perks” such as low-interest rate mortgages or SVB-sponsored “ski trips, conferences and fancy dinners.”

“Congress, bank regulators, and the public are owed an explanation for the bank’s hyper-reliance on tech industry firms and investors,” Warren and AOC wrote.

Related: Polls suggest Elizabeth Warren’s anti-crypto army strategy won’t pay off

They added the extent of SVB’s depositors in the tech industry resulted “in an abnormally high percentage of deposits” not insured by the Federal Deposit Insurance Corporation and questioned the executives on “the role that companies like yours might have played in precipitating the $42 billion single-day-run on SVB.”

“Obtaining information on these factors is important for understanding how SVB failed and how to prevent the next failure,” they added.

Warren and AOC said they believe it may explain why some customers, such as Circle, placed extremely large amounts of uninsured deposits at SVB.

Shortly after SVB collapsed, Circle disclosed that it had $3.3 billion tied up at SVB, while BlockFi was found to have $227 million in uninsured deposits with the bank.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Polls suggest Elizabeth Warren’s anti-crypto army strategy won’t pay off

Elizabeth Warren has long been a crypto-critic, and appears to be making it a focus as her re-election bid kicks off.

The United States Senator for Massachusetts Elizabeth Warren is making her “anti-crypto” agenda one of the centerpieces of her re-election campaign, despite polls suggesting the majority of Americans think crypto is a key innovation for the future.

In a March 30 Tweet, Warren suggested she was fighting to put “government on the side of working families,” and prominently quoted a Politico headline that said: “Elizabeth Warren is building an Anti-crypto Army.”

The ‘Pro-crypto Army’ took to Twitter to lambast the Senator. Popular YouTuber Coin Bureau ridiculed the strategy, saying, “Imagine thinking that building an ‘anti-crypto army’ is going to win you votes?” while crypto advocate Lord TJ suggested that the stance will “push innovation offshore.”

While the Senator undoubtedly has access to her own private polling on the issues, recent polls commissioned by the industry suggest the stance will not be a vote winner among the majority of the population.

In a Feb. 24 survey commissioned by crypto exchange Coinbase, a whopping 76% of the representative sample believed that “cryptocurrency and blockchain are the future.”

A survey commissioned by digital asset management firm Grayscale Investments in November 2022 shared similar sentiments, with the responses interestingly suggesting that 59% of Democrats consider crypto to be the future of finance. That’s more than the 51% of Republicans who said the same thing.

Democrats vs Republicans on crypto as the future of finance. Source: Grayscale

However in Warren’s favor, the crises of 2022 such as the collapses of BlockFi, FTX, and Terra Luna have weighed heavily on crypto sentiment among the public, with a recent survey from Morning Consult finding that trust in crypto had plummeted over the course of the year.

The phrase “Elizabeth Warren is building an anti-crypto army” was first featured in a Feb. 14 Politico article, which claimed she was “starting to recruit conservative Senate Republicans to her anti-crypto cause and getting some early positive vibes from bank lobbyists.”

Related: Elizabeth Warren is pushing the Senate to ban your crypto wallet

The Senator appears to have taken a liking to the phrase, however, considering she has prominently featured it in her re-election campaign.

Warren has long been a vocal critic of crypto, and even suggested that it will ruin the economy in a Wall Street Journal op-ed soon after the collapse of crypto exchange FTX.

On Feb. 14 Warren vowed to re-introduce an Anti-Money Laundering (AML) bill she had previously pushed, which would extend to decentralized finance (DeFi) and Decentralized autonomous organizations (DAOs), while also requiring unhosted wallets, miners, and validators to implement AML policies.

Web3 Gamer: Shrapnel wows at GDC, Undead Blocks hot take, Second Trip

Polls suggest Elizabeth Warren’s anti-crypto army strategy won’t pay off

Elizabeth Warren has long been a crypto-critic, and appears to be making it a focus as her re-election bid kicks off.

United States Senator Elizabeth Warren of Massachusetts is making her “anti-crypto” agenda one of the centerpieces of her re-election campaign, despite polls suggesting the majority of Americans think crypto is a key innovation for the future.

In a March 30 Tweet, Warren suggested she was fighting to put “government on the side of working families,” and prominently quoted a Politico headline that said: “Elizabeth Warren is building an Anti-crypto Army.”

The “pro-crypto army” took to Twitter to lambast the senator. Popular YouTuber Coin Bureau ridiculed the strategy, saying, “Imagine thinking that building an ‘anti-crypto army’ is going to win you votes?” while crypto advocate Lord TJ wrote that Warren’s stance would “push innovation offshore.”

While the senator undoubtedly has access to her own private polling on the issues, recent polls commissioned by the industry suggest the stance will not be a vote-winner among the majority of the population.

In a Feb. 24 survey commissioned by crypto exchange Coinbase, a whopping 76% of the representative sample believed that “cryptocurrency and blockchain are the future.”

A survey commissioned by digital asset management firm Grayscale Investments in November shared similar sentiments, with the responses interestingly suggesting that 59% of Democrats consider crypto to be the future of finance. That’s more than the 51% of Republicans who said the same thing.

Democrats vs Republicans on crypto as the future of finance. Source: Grayscale

However in Warren’s favor, the crises of 2022 such as the collapses of BlockFi, FTX, and Terra Luna have weighed heavily on crypto sentiment among the public, with a recent survey from Morning Consult finding that trust in crypto had plummeted over the course of the year.

The phrase “Elizabeth Warren is building an anti-crypto army” was first featured in a Feb. 14 Politico article, which claimed she was “starting to recruit conservative Senate Republicans to her anti-crypto cause and getting some early positive vibes from bank lobbyists.”

Related: Elizabeth Warren is pushing the Senate to ban your crypto wallet

The senator appears to have taken a liking to the phrase, however, considering she has prominently featured it in her re-election campaign.

Warren has long been a vocal critic of crypto, even arguing that it would ruin the economy in a Wall Street Journal op-ed published soon after the collapse of crypto exchange FTX.

On Feb. 14, Warren vowed to re-introduce an Anti-Money Laundering (AML) bill she had previously pushed, which would extend to decentralized finance and decentralized autonomous organizations, while also requiring unhosted wallets, miners, and validators to implement AML policies.

Web3 Gamer: Shrapnel wows at GDC, Undead Blocks hot take, Second Trip

‘How did this happen’ — Powell says Fed stumped over the collapse of SVB

In a post-FOMC meeting on March 22, the chairman of the Federal Reserve said his “only interest is that we identify what went wrong here.”

United States Federal Reserve Chairman Jerome Powell has conceded that his regulator was blindsided by the sudden collapse of Silicon Valley Bank, despite it being under their watch.

In a press conference held just after the Federal Open Market Committee meeting on March 22, Powell said he immediately knew there was a need for an internal investigation when the bank shut down on March 10, stating:

“I realized right away that there was going to be a need for a review. I mean, the question we were all asking ourselves over that first weekend was, ‘how did this happen?’”

The Federal Reserve on March 13 announced the launch of an internal investigation led by Vice Chairman Michael Barr to look into the events surrounding the failure of SVB and how the Fed “supervised and regulated” the bank.

Powell confirmed that Barr will be testifying next week.

“We’re doing the review of supervision and regulation,” Powell said. “My only interest is that we identify what went wrong here,” he added.

Federal Reserve Chairman Jerome Powell speaking at a Federal Open Market Committee conference on March 22. Source: Federal Reserve

SVB’s collapse has been linked to the Federal Reserve’s successive interest rate hikes that have been aimed at taming inflation. This is understood to have eroded SVB’s long-term bonds it purchased at near-zero rates.

When SVB announced that it suffered a $1.8 billion after-tax loss and was looking to raise $2.25 billion, the market panicked, leading to a $160 billion wipeout in its market cap in 24 hours.

The share price of SVB Financial Group fell nearly 60% on March 10. Source: Yahoo Finance

At the time, despite SVB CEO Greg Becker urging investors to “stay calm” and not to “panic”, depositors began to request withdrawals from SVB en masse, causing a bank run.

On March 10, the United States Federal Deposit Insurance Commission stepped in, taking possession of SVB to help depositors get access to their money. Emergency measures were put in place by the government soon after to guarantee all deposits at SVB.

Related: Fed starts ‘stealth QE’ — 5 things to know in Bitcoin this week

Powell’s latest comments on SVB come as the Federal Reserve Board announced that it will increase interest rates by 25 basis points.

The news has U.S. Senator Elizabeth Warren frustrated with Powell, who has now raised interest rates nine consecutive times to 5%.

“I think he’s a dangerous man to have in this job,” she said, in a March 22 interview on CNN.

“We’ve never seen hikes at this rate in the modern economy,” she said, adding that it risks “pushing our economy into a recession.”

Warren believes the effects of Powell’s “weak” regulatory approach toward large banks in the U.S. over the last five years is another factor to blame for the recent banking crisis:

“I predicted five years ago the consequence of that kind of weakening would be that we see these banks load up on risk, build their short term profits, give themselves ginormous bonuses and big salaries and then some of those banks would explode.”

“That is exactly what has happened on Jerome Powell’s watch,” Warren added.

Related: Unstablecoins: Depegging, bank runs and other risks loom

Silvergate downfall sparks debate over whose fault it actually was

The demise of the crypto-friendly bank has prompted discussion about who tipped the first domino, and where crypto firms can turn for their banking needs.

The voluntary liquidation of Silvergate Bank has sparked many to share their thoughts about the source of its troubles and the broader impact of the crypto-friendly bank’s collapse on crypto. 

From lawmakers to crypto analysts, crypto firm executives to commentators — nearly everyone’s had something to say regarding the recent announcement from Silvergate.

Some United States lawmakers have used the moment to make a comment about the state of the crypto industry, labeling it a “risky, volatile sector,” which “spreads risk across the financial system.”

Senator Elizabeth Warren called Silvergate’s failure “disappointing, but predictable,” calling for regulators to “step up against crypto risk.”

Senator Sherrod Brown also chimed in, sharing his concern that banks that get involved with crypto are putting the financial system at risk and reaffirming his desire to “establish strong safeguards for our financial system from the risks of crypto.”

The senators’ remarks have sparked criticism from the community, some of whom argue it was not a crypto problem and that fractional-reserve banking was to blame — as Silvergate held far more in-demand deposits compared to cash on hand.

Several companies have instead used the recent announcement from Silvergate to reiterate their lack of or now-severed ties with the firm.

Binance CEO Changpeng Zhao assured customers on Twitter that the crypto exchange does not have assets stored with Silvergate, while peer exchange Coinbase has also assured its followers that no customer funds were held by the bank.

Meanwhile, Nic Carter, co-founder of venture firm Castle Island and crypto intelligence firm Coin Metrics, suggested that it was the government that “hastened the collapse” of Silvergate by launching investigations and legal attacks on it.

“They’re the arsonist and the firefighter in one,” he wrote.

The CEO of financial services firm Lumida — Ram Ahluwalia — had a similar take, arguing in a tweet that Silvergate faced a bank run after a senator’s letter had undermined public trust in the firm. He saidthat “Silvergate was denied due process.”

Related: Marathon Digital terminates credit facilities with Silvergate Bank

In an earlier blog post, Carter referred to “Operation Choke Point 2.0” as being underway, claiming that the U.S. government is using the banking sector to organize “a sophisticated, widespread crackdown against the crypto industry.”

Others believe the collapse of Silvergate won’t necessarily hurt the crypto industry, but along with proposed changes to tax laws, would exacerbate the exodus of crypto firms from the U.S.

With Silvergate winding down, some have also asked where crypto firms will turn to now.

Coinbase, which previously accepted payments via Silvergate, announced on March 3 that it would facilitate institutional client cash transactions for its prime customers with its other banking partner, Signature Bank.

Signature Bank, however, announced in December that it intended to reduce its exposure to the crypto sector by reducing deposits from clients holding digital assets.

To further reduce its crypto exposure, on Jan. 21 Signature imposed a minimum transaction limit of $100,000 on transactions it would process through the SWIFT payment system on behalf of crypto exchange Binance.

CZ denounces false rumor ‘widely’ spread on China’s WeChat

A Metamask security analyst stated that the rumor was the “2023 adaptation of attempted market manipulation.”

Binance CEO Changpeng “CZ” Zhao has denied a rumor that he had been “shot” by the U.S. federal law enforcement agency, which was “spread widely” across a Chinese messaging platform, in a recent tweet.

In a Mar. 4 tweet, CZ addressed the false speculations that circulated on the Chinese messaging platform WeChat, claiming that he was “shot” by The Federal Bureau of Investigation (FBI), taking the opportunity to reiterate the close working relationship that exists between Binance and the FBI.

He wrote the number “4,” at the end of the tweet, which refers to his Jan. 3 tweet about simplifying his goals for 2023.

He listed the 4th goal as a reminder to ignore FUD (Fear, Uncertainty, and Doubt), fake news, attacks, and other distractions.

The first 3 goals listed were to focus on education, compliance as well as product and service.

Shortly after, CZ retweeted a tweet by a user asking him, “Brother Peng, I heard that you were biu-biued by the FBI? If it’s true, you just nod your head and give a hint [translated].”

The user had circled text on a screenshot that stated “Zhao Changpeng was shot dead by the FBI [translated].”

Related: Binance CEO responds to Forbes claims: ‘They don’t know how an exchange works’

Harry Denley, a Metamask security analyst, likened the event to a false rumor spread about Ethereum co-founder Vitalik Buterin in 2017 of “dying in a car crash.”

Denley called the rumor about CZ the “2023 adaptation of attempted market manipulation,” and suggested that CZ does a “proof of life” with the latest Binance Smart Chain (BSC) block hash.

It was previously announced in Oct. 2022 that Binance.US hired former FBI special agent BJ Kang to head up its investigation unit, aimed at combating illegal activity on the platform.

Kang was once dubbed “the most feared man on Wall Street” by Reuters after being photographed arresting Bernie Madoff – who was found guilty of running the largest Ponzi scheme to date.

In more recent news, CZ, along with Binance.US CEO Brian Shroder, were sent a letter on Mar. 1 from three United States senators, Elizabeth Warren, Chris Van Hollen and Roger Marshall, demanding more information regarding the financials of Binance.

The senators claimed that the “little information” available in regards to Binance’s financials, suggests that the exchange is a “hotbed of illegal financial activity.”

CZ denounces rumor ‘widely’ spread on China’s WeChat

A MetaMask security analyst said the rumor was the “2023 adaptation of attempted market manipulation.”

Binance CEO Changpeng “CZ” Zhao has denied a rumor that he had been “shot” by a United States federal law enforcement agency after it “spread widely” across a Chinese messaging platform.

In a March 4 tweet, CZ addressed the false speculations circulating on the Chinese messaging platform WeChat — claiming he was “shot” by The Federal Bureau of Investigation (FBI) — taking the opportunity to reiterate the close working relationship that exists between Binance and the FBI.

He wrote the number “4” at the end of the tweet, referring to his Jan. 3 tweet about simplifying his goals for 2023.

He listed the 4th goal as a reminder to ignore FUD (Fear, uncertainty and doubt), fake news, attacks and other distractions.

The first three goals listed were to focus on education, compliance, as well as product and service.

Shortly after, CZ retweeted a tweet by a user asking him, “Brother Peng, I heard that you were biu-biued [shot] by the FBI? If it’s true, you just nod your head and give a hint [translated].”

The user had circled text on a screenshot that stated, “Zhao Changpeng was shot dead by the FBI [translated].”

Related: Binance CEO responds to Forbes claims: ‘They don’t know how an exchange works’

A MetaMask security analyst, Harry Denley, likened the event to a false rumor spread about Ethereum co-founder Vitalik Buterin in 2017 “dying in a car crash.”

Denley called the rumor about CZ the “2023 adaptation of attempted market manipulation,” and suggested that CZ does a “proof of life” with the latest BNB Smart Chain block hash.

It was previously announced in October 2022 that Binance.US hired former FBI special agent BJ Kang to head up its investigation unit to combat illegal activity on the platform.

Kang was once dubbed “the most feared man on Wall Street” by Reuters after being photographed arresting Bernie Madoff — who was found guilty of running the largest Ponzi scheme in history.

In more recent news, CZ and Binance.US CEO Brian Shroder were sent a letter on March 1 from three United States senators, Elizabeth Warren, Chris Van Hollen and Roger Marshall, demanding more information regarding Binance financials.

The senators claimed that the “little information” available regarding Binance’s financials suggests that the exchange is a “hotbed of illegal financial activity.”