GUEST COMMENTARY - On January 31 of last year, Oliver Sullivan reported at Lawyer Monthly that the growing list of countries “that wholly banned cryptocurrencies includes China, Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia, Bangladesh and (as of this month) Kosovo. Forty-two others have passed restrictions to this effect, prohibiting crypto exchanges or limiting the ability of banks to engage with crypto.”
Compare that to the United States, which increasingly looks like a financial backwater, with questionable crypto deposits blowing up federally-insured banks; collapsing publicly-listed crypto mining stocks whose business model is to pump more fossil fuels into the atmosphere in order to solve complex mathematical problems that have no productive purpose; $8 billion in customer funds going missing at the FTX crypto exchange which was promoted by media darlings on television; and, of course, Big Law firms getting fat at the crypto bankruptcy troughafter shilling for these same crypto firms for years before federal regulators.
On NBC’s Meet the Press on Sunday, December 18, Senator Sherrod Brown, the Chair of the Senate Banking Committee, was asked by host Chuck Todd if crypto and the massive fraud at FTX didn’t demonstrate that there is “a huge vulnerability in our system?” Senator Brown responded as follows:
“We had our sixth hearing on crypto to educate the public about its dangers. Not just the Ponzi scheme you talk about and not just the lack of consumer protection or regulation, but also the threat to national security from Korean cyber criminals to drug trafficking and human trafficking and financing of terrorism and all the things that come out of crypto.”
Let that sink in for a moment. Ten other countries also determined that crypto was a national security threat and outlawed it. The U.S. knows it’s a national security threat but allowed it to be promoted to its citizens on television in Super Bowl commercials.
Todd then asked Brown if crypto should even be legal in the United States. Brown responded that banning it is very difficult because it would go offshore “and who knows how that will work.” (You can watch the full exchange between Todd and Brown beginning at 7:43 minutes at this Meet the Press link.)
(This article first appeared on Wall Street on Parade.)