01 Jun 2022 · 3 min read

Group of Tech Pros, Academics Urges Washington to Turn its Back on Crypto Lobbyists

A statue of George Washington in the Capitol Rotunda in Washington DC. Source: Adobe/kirkikis

 

A collective comprising 26 IT experts and professionals has slammed crypto, accusing blockchain and crypto of “not being decentralized” – and has petitioned United States politicians to crack down on the sector and its lobbyists.

The group includes the Harvard University lecturer Bruce Schneier, the former Microsoft engineer Miguel de Icaza and a principal engineer at Google Cloud named Kelsey Hightower, the Financial Times reported, while the software developer and outspoken crypto critic Stephen Diehl took to Twitter to justify the campaign, writing:

“Crypto fraud is spiraling out of control. So-called Web3 is not going great. Regulators are paralyzed and people are getting hurt left and right. It’s on us as citizens and responsible engineers to help fix the problem we created by our inaction.”

The group appears to have taken exception to the work of Washington-based “crypto advocates who want to resist attempts” to regulate what the FT called a “frothy sector.”

The letter has been addressed to the Senate Majority and Minority Leaders Charles Schumer and Mitch McConnell and “leading senators” such as Republican Patrick Toomey and Democrat Ron Wyden. The latter two are believed to be pro-crypto in their stance on a range of matters.

The Financial Times quoted the IT professionals as writing in the letter:

“We urge you to resist pressure from digital asset industry financiers, lobbyists, and boosters to create a regulatory safe haven for these risky, flawed, and unproven digital financial instruments.”

They added:

“Cryptoassets have been the vehicle for unsound and highly volatile speculative investment schemes that are being actively promoted to retail investors who may be unable to understand their nature and risk.”

The media outlet quoted the Harvard lecturer as opining:

“The claims that the blockchain advocates make are not true. [Crypto] is not secure, it’s not decentralized. Any system where you forget your password and you lose your life savings is not a safe system.”

Diehl, meanwhile, claimed that the group’s effort was “counter-lobbying,” and stated that the “crypto industry has its people” who “say what they want to the politicians.”

The same media outlet pointed to Congressional Lobbying Disclosure data that showed a large increase in crypto lobbying in the period 2018-2021, with the amount of money spent on lobbying for the crypto sector “quadrupling” from USD 2.2m in 2018 to USD 9m last year. Major crypto exchange Coinbase alone spent USD 1.5m on lobbying last year, while the data shows that the likes of Meta, Visa, and PayPal are engaged in pro-crypto lobbying.

And the signatories reportedly have “gone further to claim that crypto and blockchain tech serve no real purpose.”

De Icaza was quoted as explaining:

“The computational power [of crypto] is equivalent to what you could do in a centralized way with a USD 100 computer. We’re essentially wasting millions of dollars’ worth of equipment because we’ve decided that we don’t trust the banking system.”

Diehl also shared a tweet from Jorge Stolfi, a Computer Science Professor at the State University of Campinas, who wrote:

“Every computer scientist should be able to see that cryptocurrencies are totally dysfunctional payment systems, and that ‘blockchain technology’ (including ‘smart contracts’) is a technological fraud. Would they please say that out loud?”

Another American computer scientist replied to this tweet, opining that “there is no computing problem for which blockchain is anywhere near the best solution.”

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