An interview with Massachusetts Senator Elizabeth Warren took place July 2021. In the interview, she said that crypto regulations were similar to drug regulations from a century ago, which she said helped stop the sale of “snake oil” and set up a modern-day industry for drugs.
This is in line with her earlier statements that the digital currency market is like the “Wild West,” which makes it a bad investment and a bad thing for the environment.
This is a fair question to ask: Is Warren using the Ukraine conflict as a pretext to act on her long-held dislike of digital assets?
From the ivory tower to Capitol Hill
A typical Democrat is someone who has been liberal for most of their lives. Senator Warren isn’t that kind of person.
During the progressive era, when the middle class was pitted against the well-funded interests of big business, she talks about how regulation was used to make the economy more stable and protect the middle class.
During her time as a bankruptcy professor at Harvard Law School, she wrote a number of books that made her a champion of the middle class and new financial regulations. Her ideas were popular during the subprime crisis that led to the 2008 financial crisis.
That year, the U.S. Senate asked Elizabeth Warren to chair the Congressional Oversight Panel, which was in charge of making sure the Emergency Economic Stabilization Act, the $700 million bailout package, was done right. Warren did this job.
This set the stage for when she went into politics a few years later when she became a Massachusetts senator at the age of 63, which was a long time ago now.
Senate website: “Senator Warren is a member of the Senate Banking, Housing and Urban Affairs Committee, where she works on legislation that affects financial services and the economy, housing and urban development, and other things. She also helps with oversight of federal regulatory agencies.”
Only business regulation, nothing personal
Sen. Warren has been a champion of financial regulation and an advocate for the middle class for years, but she has never been a big fan of Russia.
Vladimir Putin’s “special military operation” in Ukraine on Feb. 24 seemed to change this. The United States, along with other countries, took steps to hurt Russia’s economy.
There’s a good chance she wrote the regulations long ago and had been waiting for the right time to ask Republicans to support them. Warren was able to put together a set of comprehensive rules for the crypto industry in just a few weeks.
Before former U.S. President Donald Trump joined the Republican Party, antipathy toward Russia wasn’t seen as partisan or just for the Democratic Party.
Taking a look at anti-Russia statements and who signed them shows that they come in three forms.
The first is when everyone agrees that Russia is bad. This usually happens right after Russia makes a big political move against a foreign country, like Ukraine or Georgia.
The second type is linked to claims that Putin tried to help Trump win the 2016 U.S. presidential election so that he would win.
It has been a rallying cry for many Democrats for a long time, even though most Republicans don’t believe the story,
In his investigation into the matter, former FBI Director Robert Mueller found that Russia tried to help Trump win the election in a systematic way, but he didn’t find out whether the efforts worked.
On the other hand, there are some Republican hawks who are very against Russia, and these Senators could be very important in getting Warren’s legislation passed.
John McCain, one of the most well-known anti-Russian hawks, died in 2018. There are also other, less well-known anti-Russian hawks.
A group of 12 Republicans and 15 Democrats called on then-President-elect Trump to keep up the United States’ “tradition of supporting the people of Ukraine in the face of Russian aggression” in December 2016, after Trump won the election.
When the senators signed, Warren wasn’t one of them. Most are still in office, but not all of them.
In March 2022, the Senate slammed Russia on two different times.
Senator Lindsey Graham, the most ardent Republican anti-Russian hawk, was the person who wrote the resolution both times.
Warren voted for the resolutions, but she wasn’t one of the many people who signed on to them.
Civil forfeiture: An ugly precedent
When Warren wants to stop crypto, there is already a precedent for what he wants to do to stop it.
U.S. federal officials have been taking money from people who haven’t declared it for more than two decades at airports when they’re going to or from other countries.
The official reason for the practice is that it stops people from selling illegal drugs.
Officials can just take someone’s money if they find more than $10,000 in cash that they didn’t declare. It can be hard to get it back.
In a report from the Institute for Justice, a civil liberties law firm, it says that law enforcement agencies “routinely seize currency from travelers at airports across the country using civil forfeiture, a legal process that allows agencies to take and keep property without ever charging people with a crime, let alone getting a conviction.”
Between 2000 and 2016, more than $2 billion worth of cash was taken from U.S. airports, which is a lot.
There were, however, no arrests made 69% of the time.
When you take drug dealers’ money, you hit them where it hurts most by taking away their money, says Jennifer McDonald, a senior research analyst at the Institute for Justice who wrote the report.
“It’s not going to work.
There’s a lot of research that shows that civil forfeiture doesn’t cut crime or drugs at all.
Warren’s legislation also has a lot in common with the USA PATRIOT Act, which was passed in 2001 and made it more difficult for terrorists to get money to fund their activities.
Title III says that U.S. businesses can’t work with offshore shell banks that aren’t linked to a bank on U.S. soil, which is supposed to stop suspicious activity abroad.
Banks were required by law to look into the accounts of politicians who were suspected of corruption in the past.
After Sept. 11, 2001, many people thought the PATRIOT Act was a bad idea. At first, both Republicans and Democrats thought it was a good idea, because of the sense of urgency after the attacks.
Excuse to target crypto?
There is a good chance that the proposal from Senator Warren is just a way to target crypto, using Russia as a way to get support from both sides of the aisle.
There is a chance that Warren’s efforts won’t be as good as those of civil forfeiture, which is used to fight drug trafficking.
Jake Chervinsky, the head of policy at the Blockchain Association, says that existing laws against Russian businesses are enough because crypto markets aren’t big enough or transparent enough to help the Russian economy, which has been effectively shut down.
Bitcoin (BTC) and the Russian ruble don’t have a lot of buyers.
Chervinsky also said that “to make a real difference, Russian SDNs [Specially Designated Nationals] would have to convert billions of dollars worth of rubles into crypto.” He said that Russia is already cut off from most of the crypto industry because of the sanctions.
The country may not even need to use crypto because China and India are willing to de-dollarize trade, a process that has been in the works for a long time.
Because of this, it looks like Senator Warren’s push for new crypto regulations may be a disguised attack on the business.
It looks like her use of a heavily sanctioned country like Russia could be a good way to get more restrictive measures passed in a Senate that is evenly split.