The Blockchain Association, a nonprofit advocating for "pro-innovation" policies for the digital asset industry, announced on X, formerly Twitter, that a group of cryptocurrency experts with U.S. military and national security backgrounds has sent a letter to Congressional committee leadership outlining their concerns with the misrepresentation of crypto's role in terror financing. The experts sent the letter in an attempt to address the prevailing misconceptions surrounding the use of cryptocurrencies.
The coalition sent the letter to Rep. French Hill and Stephen Lynch, chair and ranking member of the Subcommittee on Digital Assets, Financial Technology and Inclusion; Patrick McHenry and Maxine Waters, the chair and ranking member of the House Financial Services Committee; and Senators Sherrod Brown and Tim Scott, the chair and ranking member of the Senate Banking Committee.
The forty digital asset and national security experts sent the letter on Nov. 15, stating that they hope to partner with the committee leaders to "achieve long-term solutions" to the problem of illicit finance, according to a copy of the letter shared on X by the Blockchain Association. They requested to meet with the lawmakers during a visit to Capitol Hill on Nov. 28.
The group said that recent reports about the terrorist organization Hamas's use of crypto have been "grossly overstated" and "debunked," but the false reporting continues to serve as a means to advocate for legislation "that would be counterproductive to U.S. national security interests." They said that the technology behind blockchain and crypto has mostly attracted "good actors" seeking to build products for mainstream use, but it has also drawn in "its share of unscrupulous actors." Despite the efforts of those bad actors, the letter stated that illicit activity represents a "very small fraction" of total crypto transactions.
The letter highlighted the digital asset industry's dedication to rooting out and punishing bad actors who seek to misuse crypto, and said that in order to do so effectively, Congress should try to keep the industry in the U.S., where it will be "subject to our laws, regulations, and values," rather than pushing the industry offshores. They warned that pushing the crypto industry overseas would leave the U.S. with a lack of expertise and insight into the industry while increasing the liquidity of unregulated foreign exchanges.
"It’s clear that there is a mismatch between the assumptions about the role that digital assets play in global financial transfers and the facts on the ground," Blockchain Association CEO Kristin Smith said in a statement shared on X. "The signatories state clearly that no amount of money, whether it be gold, dollars, or digital assets should be used to fund illicit activity, but we must also be able have a reasonable conversation about the latter when it comes to proposed solutions to the problem. We hope that expert voices from the digital assets industry will help balance the conversation and lead to real solutions that respect the technology and allow it to continue to grow in the United States."
The forty individuals who signed the letter include Faryar Shirzad, Coinbase's chief policy officer and a former deputy national security advisor for International Economic Affairs; Gus Coldebella, a partner at True Ventures and former acting general counsel for the U.S. Department of Homeland Security; Michele Korver, the head of regulatory at a16z Crypto and a former chief digital currency advisor with FinCEN at the U.S. Treasury Department; and Kyle Schneps, director of public policy at Foundry and a former CIA officer.
