In this report, we assess today’s Senate Banking hearing on cryptocurrency which included a considerably more vigorous discussion of crypto risks than evident in past sessions (see Client Reports in the VC series). Chairman Crapo (R-ID) applauded increased CFTC and SEC attention, but pointed to significant volatility arising in part from pump and dump cryptocurrency schemes. Ranking Member Brown (D-OH) raised similar investor protection concerns while Sens. Toomey (R-PA) and Warren (D-MA) – rarely allies – worried about increased concentration and foreign control of cryptocurrency mining. Sen. Kennedy (R-LA) asked broadly whether cryptocurrency has made the world a better place and whether broader blockchain technology offers any benefits. While Peter Van Valkenburgh of Coin Center offered an optimistic assessment of the technology’s disruptive potential, Nouriel Roubini of the New York University Stern School of Business forcefully condemned crypto as an inherent scam and blockchain as non-productive.
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