Dozens of leaders in the tech sector have called on lawmakers to take a hard line with the cryptocurrency industry as it increases its influence in Washington.
In an open letter on Wednesday, 26 computer scientists, software engineers and academics -- including Harvard computer security expert Bruce Schneier and Google Cloud principal engineer Kelsey Hightower -- urged Congress 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 was addressed to lead Democrats and Republicans in Congress, including House Speaker Nancy Pelosi, House Minority Leader Kevin McCarthy, Senate Majority Leader Chuck Schumer and Senate Minority Leader Mitch McConnell, as well as members of the Senate Committee on Banking and the House Financial Services Committee.
It questioned the rosy picture painted by blockchain insiders "that these technologies represent a positive financial innovation and are in any way suited to solving the financial problems facing ordinary Americans."
The letter also cautioned that crypto assets are being used to promote "unsound and highly volatile speculative investment schemes" to investors who may not understand the real risks.
"The claims that the blockchain advocates make are not true," Schneier told the Financial Times. "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."
The warning comes nearly three months after President Joe Biden called on the Treasury Department, the Federal Reserve and other government agencies to research crypto's risks and rewards and to explore the possibility of creating a government-controlled cryptocurrency or "digital dollar."
Lobbying dollars spent by the crypto industry roughly quadrupled from $2.2 million to $9 million between 2018 and 2021, according to analysis by the consumer advocacy group Public Citizen.
"[The] crypto lobby is spending millions to tell leaders that crypto-assets are 'innovation' and all fintech innovation is unqualifiedly good, no matter the human cost," signatory Stephen Diehl, a UK software engineer, tweeted Wednesday.
"Today we set the record straight on what computer scientists really think about blockchain," Diehl added.