Top Experts From Microsoft, Google Call to Crackdown Crypto Lobbying

Key Insights:

• Leading scientists and academics sign a letter to US legislators asking to counter the crypto industry’s influence.
• The letter outrightly rejected claims made by crypto advocates who attempt to regulate the sector.
• Crypto industry influencers increased from 115 to 320 in the past four years.

Recently, cryptocurrency tycoons are emerging as the new players in American politics. Bitcoin’s (BTC) most ardent supporters are driving an influx of cash into campaigns across the US.

On the other hand, the country and most of its congressmen are also turning “pro-crypto” by considering new regulations to streamline the frothy industry. Crypto advocates in the United States have been putting extra effort into supporting the sector. A recent report said that crypto lobbyists have nearly tripled since 2018.

While politicians such as Rep. Ritchie Torres, a New York Democrat, are encouraging citizens to support the crypto market, a bunch of top technologists and scientists have challenged the growing influence of crypto influencers and lobbyists.

“Counter-lobbying” efforts

Tech experts Miguel de Icaza from Microsoft, Kelsey Hightower, a principal engineer at Google Cloud, and top academics, including Harvard lecturer Bruce Schneier have jointly called for a crackdown on the influence of the rapidly growing crypto industry.

In a letter addressed to US lawmakers, the group has “counter-lobbied” the burgeoning digital assets sector, criticizing crypto investments and the underlying blockchain tech.

The letter, seen by the Financial Times, read,

“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.”

The letter included the names of Senate Majority and Minority Leaders Charles Schumer and Mitch McConnell, Republican Patrick Toomey, and Democrat Ron Wyden. Patrick and Ron have supported a few crypto developments previously.

The letter intends to lessen the negative impact of crypto lobbying, such as the recent Terra network collapse that overturned the entire crypto community. Many investors have lost a fortune in their Terra (LUNA) and TerraUSD (UST) savings.

Although several individuals have questioned the safety and reliability of cryptos, the joint approach marks the first ‘organized effort’ to counter the attempts of crypto advocates to lure mass focus, the FT report said.

A pro technologist and an academician, Bruce Schneier, once said cryptos are “useless.” He said that the claims made by advocates on cryptocurrencies are not true. He said,

“It’s not secure, it’s not decentralized. Any system where you forget your password and you lose your life savings is not a safe system.”

Another signatory and a London-based software engineer Stephen Diehl called the letter “counter-lobbying,” while de Icaza, a former Microsoft engineer, said that millions of dollars are being wasted in getting crypto equipment. 

The letter noted,

“Crypto-assets 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.”

Crypto lobbyists triple since 2018

The reason behind fears and counter-lobbying efforts is that the businesses that influence crypto policy in the US have skyrocketed in the past four years. 

A new study released in March by Public Citizen noted that crypto lobbyists have nearly tripled since 2018. Per the findings, the number of crypto influencers jumped to 320 in 2021 from 115 in 2018.

Apart from this, the spending on crypto lobbying quadrupled from $2.2 million in 2018 to $9 million in 2021. The expenditure was driven by crypto exchange giant Coinbase (COIN), Ripple (XRP) Labs, and Blockchain Association. The study noted that each of these participants spent over $2 million on lobbying between 2018 and 2021.