BREAKDOWN: A "Crypto Frenzy"? Today's Congressional Hearing Puts Bitcoin and DeFi in the Hot Seat

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4.7 • 698 Ratings

🗓️ 30 June 2021

⏱️ 20 minutes

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Summary

U.S. hearing on crypto indicates policymakers’ increasing intention to regulate the crypto market. This episode is sponsored by Nexo.io. An interview with a congressman followed by a congressional hearing on crypto signal policymakers are moving to the next phase of talks about regulating crypto. Troubling comments in Congressman Bill Foster’s interview with Axios Upcoming committee hearing titled ominously “America on ‘FIRE:’ Will the Crypto Frenzy Lead to Financial Independence and Early Retirement or Financial Ruin?” Foster has historically been a champion of the crypto market: He is a co-chairman of the Congressional Blockchain Caucus and was previously supportive of the future of crypto. However, in his recent Axios interview, his tone flipped, as he went as far as to suggest the need for a “cryptographic backdoor” to allow the court the ability to view or even reverse transactions. Is Foster’s new viewpoint indicative of a greater shift in policymakers’ attitude toward crypto regulation? Today’s House Committee on Financial Services hearing with a particularly colorful title is yet another signal for an upcoming regulatory push in crypto. The hearing’s agenda includes a discussion of bad actors on decentralized currency exchanges, or DEX, including a reference to Mark Cuban’s recent loss of money in a DeFi “rug pull.” With an expert witness lineup, including Jim Cramer of “Mad Money,” Alexis Goldstein of the Open Markets Institute and Peter Van Valkenburgh of CoinCenter, there is quite a mixed set of viewpoints on the current state and future of crypto. - Nexo.io lets you borrow against your crypto at 6.9% APR, earn up to 12% on your idle assets, and exchange instantly between 100+ market pairs with the tap of a button. Get started at nexo.io. - Image credit: franckreporter/iStock/Getty Images, modified by CoinDesk See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Transcript

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0:00.0	The full hearing name is America on fire. Will the crypto frenzy lead to financial independence
0:05.0	and early retirement or financial ruin? Good job, intern committee naming person.
0:12.5	Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big
0:20.0	picture power shifts remaking our world.
0:23.6	The breakdown is sponsored by nexus.io and produced and distributed by CoinDesk.
0:30.3	What's going on, guys? It is Wednesday, June 30th. And today we are talking about a congressional hearing that is putting Bitcoin, crypto, and
0:38.8	Defi in the hot seat. Now, there has been something of an alarming shift in tone around
0:45.5	crypto among U.S. politicians. Yesterday, Congressman Bill Foster participated in an interview with
0:51.1	Axios and gave insight into how much sentiment among U.S.
0:55.0	lawmakers was turning against crypto.
0:58.0	Quote, I'm not there yet, but there's significant sentiment in Congress that if you're participating
1:02.8	in an anonymous crypto transaction, that you are a de facto participant in a criminal
1:07.8	conspiracy.
1:09.2	For the sake of this episode and me actually getting all the way through it,
1:12.6	let's get it out of the way that this is an absurd point of view. It's like saying that if someone
1:17.5	buys cigarettes or alcohol or condoms with cash, they're part of a criminal conspiracy. It's ridiculous,
1:23.3	but unfortunately, I don't see much resonance for that argument. As we'll see, I believe that lawmakers right now are more likely to want to ban cash than to accept anonymous crypto transactions.
1:33.4	Anyway, I wanted to get my two cents on the absurdity of this whole line of reasoning out of the way so that we can focus on the tonal shift.
1:40.5	In the same interview, Foster argued that it's not just governments, but actually citizens, investors
1:44.7	that want the ability to, quote, unmask crypto participants and reverse fraudulent transactions.
1:49.8	Quote, I think for most people, if they are going to have a big part of their net worth tied up in
1:53.7	crypto assets, they're going to want to have that security blanket of a trusted third party.
	...

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