Cryptoverse Smarts as ‘Bad Actor’ Readies to Talk Stablecoins to US Senate
A US Senate hearing will hear testimony on stablecoins today – but some crypto community members have expressed concern that some of those summoned before the American upper house could be bringing misinformation and inaccuracy to the table.
As previously reported, some lawmakers and regulators have been gunning for stablecoin-related regulation, with the Securities and Exchange Commission Chairman Gary Gensler likening fiat-pegged tokens to “poker chips” at “a casino” on multiple occasions.
A number of crypto community members have bristled at the fact that a hearing before the Senate’s Banking, Housing and Urban Affairs Committee will hear testimony from “people nobody in crypto has ever heard of.”
Preston Byrne, a lawyer with Anderson Kill, lamented the fact that “a politician that has the guts to stand up for Alameda and Cumberland’s tether (USDT) exposures” – namely the committee’s Chairman Senator Sherrod Brown – had summoned Alexis Goldstein, the Director of Financial Policy at the Open Markets Institute and Hilary J. Allen of the American University Washington (College of Law) for the event, which takes place later today.
It appears that the selection of Goldstein is what has really rankled the USA-based crypto community, however.
Goldstein published her own testimony ahead of time.
Nic Carter, a General Partner at Castle Island Ventures, did not hold back with his criticism, remarking ironically on Twitter that “the geniuses over at Open Markets (whatever the hell that is),” had “decided that a typical stablecoin remittance flow includes a bank wire, of all things.”
the geniuses over at the @openmarkets (whatever the hell that is) decided that a typical stablecoin remittance flow includes a bank wire, of all things. this is official senate testimony pic.twitter.com/Uez5pmEJME— nic 🌠 carter (@nic__carter) December 14, 2021
“This is official senate testimony,” he lamented.
Magdalena Gronowska, a CoinKite Vice President, went a step further in her reply to Carter’s tweet, calling Open Markets a “bad actor” that “should be called out as such.” She added: “They’re spreading misinformation on more than just stablecoins.”
Gronowska illustrated her point by pointing to an August 5 tweet from Open Markets that claimed:
“The crypto mining industry is made up of sophisticated technical players capable of furnishing tax reports to the Internal Revenue Service.”
In the same August report, Open Markets noted:
“Even individual crypto miners are capable of tax reporting because they generally don’t actually act alone. Mining pools allow solo miners to split earnings (generating massive revenues). And publicly traded companies that work with private investment funds help hedge risk.”
Gronowska also added that there was a large number of other players – such as the NGO and pressure group Coin Center and the Blockchain Association – who would have done a better job representing the industry. Open Markets, she claimed “[doesn’t] understand our industry,” and said its “submitted testimony” was fraught with “errors and misinformation.”
She went on to call the group “malicious” and questioned who was funding it.
For those asking, she cites me for the idea that "the point" of DeFi is to "let people get rid of their fiat." 🤔— Jake Chervinsky (@jchervinsky) December 14, 2021
Reminder, I spent literally years working on a DeFi project that has nothing to do with that!
My quote was about @jack building a DEX on Bitcoin, not about DeFi. 🤦♂️
Per the body’s own website, the biggest funders of the group are the John S. and James L. Knight Foundation and an anonymous donor. The former, per Influence Watch, is a “left-leaning private foundation that sets a primary emphasis on funding media-related projects” – and has previously been “critical of the dominance of large technology companies such as Facebook, Amazon, Apple and Google.
Other donors included philanthropic groups like the William and Flora Hewlett Foundation, a body set up by the co-founder of the United States tech giant Hewlett-Packard (now HP), as well as a number of other anonymous backers.
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(Updated at 15:11 UTC with a tweet by Jake Chervinsky.)