At the Crypto Policy Symposium, the skeptics of the cryptoeconomics come into resistance

Regulate the crypto-asset market? A ” issue of general interest “. Develop a critical discourse towards them? A ” democratic issue “. This is the message hammered out by forty personalities from the scientific, academic and political worlds, computer technology experts as well as journalists from the economic and financial press, gathered on September 5 and 6 for the Crypto Policy Symposium in London..

While the crypto-asset industry can count on hundreds of gatherings to spread an evangelistic discourse, like Surfin’Bitcoin, which ended on August 27 in Biarritz, this international critical conference is the first of its kind. . “We are a small group of dissidents facing an industry worth trillions of dollarsrecognizes Stephen Diehl, computer engineer specializing in finance and co-organizer of the event. But we hope to weigh because our action is in the direction of the general interest. There is an urgent need to better inform lawmakers and regulators about the dangers of the cryptoeconomy, in a context where the risks for the general public have never been higher. »

A predatory economy for the most vulnerable

The contrast between the media coverage maintained by the promoters of the cryptoeconomic industry and the reality of the market worries the cryptosceptic community, eager to be better heard. “Each bubble is bigger than the previous one. Each time there is more money at stake, but also more victims”alarmed freelance journalist Amy Castor, citing the domino effect produced since the spring of 2022 by the collapse of the “stablecoin” terra-luna, the placement in liquidation of the hedge fund Three Arrows Capital and the bankruptcy filings of the Celsius Network platform as well as the broker Voyager Digital.

Read also: Cryptocurrency platform Celsius declares bankruptcy

This observation is shared by Molly White, computer engineer and editor of Wikipedia. With her blog Web3 Is Going Just Great, where she methodically maps out the scams and failures of crypto-economy companies, she has emerged as one of the most fiercely critical voices of the crypto-asset industry. Lately, she immersed herself in the testimonies filed in the Celsius bankruptcy file. This investigation left her bitter:

“People who couldn’t afford it lost everything. Modest people have invested their savings thinking of using the announced returns to pay for their children’s higher education. Pre-retirees have lost the savings amassed during their working years. Everyone was told that cryptoassets were risk-free investments. »

Management consultant and conference co-organizer Martin Walker compares cryptoassets to toxic financial products, as corrosive as payday loans (payday loans) or high interest credit cards. The dimension “predator” is accentuated by the fact that cryptos often present themselves as “inclusion tools” for people “historically excluded from the banking system and financially vulnerable, like black and Latino communities in the United States”adds Tonantzin Carmona, specialist in banking inclusion issues and researcher at the Brookings Institution.

The notions of “easy money”, “independence” and “financial freedom” are enduring myths in the cryptoeconomy, says journalist Jacob Silverman. However, this specialist in the political stakes of new technologies affirms it, the market of crypto-assets is above all ” inequitable, asymmetrical, not very transparent » – characteristics which allow, according to him, the “fraud, manipulation and insider trading”. The cryptoeconomy is above all a form of « casino-capitalism finally summarizes American actor Ben McKenzie, a claimed cryptoskeptic, who co-signs with Jacob Silverman Easy Moneyan essay that traces major cases of financial fraud and is scheduled for publication in 2023.

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Lobbying to limit regulation of the sector

For David Gerard, IT consultant and author in 2017 ofAttack of the 50 Foot Blockchaina trial against the blockchain, it is urgent to deconstruct the discourse on the revolutionary nature of this technology and cryptoassets in general : “Their only innovation is to industrialize fraud at such a speed that regulators will always be taken aback. » “Smart contracts” (“smart contracts”), “Initial Coin Offering” (“first token issuance”), “consensus protocol”, etc. : Crypto industry proponents otherwise use terms that are both complex and vague, “ which has the effect of obscuring their intentions and slowing down the action of regulators”judges law professor Edmund Schuster, professor at the London School of Economics.

Read also: “Web3” explained in four questions

During a discussion devoted to the environmental impact of the crypto-asset industry, Martin Walker was also alarmed to see some of its promoters affirm to politicians that mining would make it possible to accelerate the energy transition. This marketing discourse would only be an attempt to “greenwash” the heavy carbon footprint of transactions, mining, but also the manufacture of equipment intended for this activity.

The crypto-asset industry is indeed deploying significant lobbying efforts to delay or limit regulation of the sector. For this, she can count on “the financial support of powerful venture capital firms, like a16z or Paradigm in the United States”emphasizes Amy Castor, very critical of the firm Andreessen Horowitz (a16z), which she accuses of ” lies “ and of “propaganda”. The sector can also count on the support of certain crypto-billionaires: Sam Bankman-Fried, for example, assumes that he wants to guide public decision-making and positions himself as a “mega-donor” of the American Democratic Party.

His action finds an echo among certain political figures, who fervently defend the crypto-active industry, like Republican Senator Cynthia Lummis, in the United States. In the United Kingdom, the new Prime Minister, Liz Truss, meanwhile already pronounced for a limitation of the supervision of the sector. In France, the former deputy of La Républiqe en Marche Pierre Person also expressed his enthusiasm for the crypto-asset industry, in a report dating from June.

Read also: Europe is giving itself a legal framework to regulate crypto-assets

At the end of the conference, some of the organizers therefore undertook what is, in their view, a first act of resistance: the creation of the Center for Emerging Technology Policy, a non-profit organization aimed at directing regulation on cryptoassets in Europe and the United States. This think tank intends to become a counter-power to a powerful, organized and well-financed industry.

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