Regulate the crypto-asset market? A “problem of general interest”. Develop a critical discourse towards them? A “democratic issue”. This is the message hammered home 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 in its kind. “We are a small group of dissidents in the face of an industry worth trillions of dollars, recognizes Stephen Diehl, computer engineer specialized 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 industry promoters and the reality of the market worries the cryptosceptic community, eager to be better heard. “Each bubble is bigger than the last. Each time there is more money at stake but also more victims”, alarmed the independent 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 pension fund Three Arrow Capital (3AC) and the bankruptcy filings of the exchange platform Celsius Network as well as the broker Voyager Digital.
An observation shared by Molly White, computer engineer and editor of Wikipedia. With her blog Web3 is going just great, where she methodically maps scams and failures of crypto businesses, she has emerged as one of the most fiercely critical voices in the industry. crypto-asset industry. Lately, she’s been digging into the testimonies in Celsius’ bankruptcy case. 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. »
Martin Walker, management consultant and also co-organizer of the conference, compares crypto-assets to toxic financial products, as corrosive as payday loans or high-interest credit cards. A “predatory” dimension accentuated by the fact that cryptos often present themselves as “tools of inclusion” for people “historically excluded from the banking system and financially vulnerable, such as black and Latino communities in the United States” , adds Tonantzin Carmona, specialist in banking inclusion issues and researcher at the Brookings Institution.
Notions of “easy money”, “independence” and “financial freedom” are enduring myths in the cryptoeconomy, says journalist Jacob Silverman. However, underlines this specialist in the political stakes of new technologies, the crypto-asset market is above all “inequitable, asymmetrical, not very transparent”, characteristics which according to him authorize “fraud, manipulation and insider trading”. The cryptoeconomy is above all a form of “casino-capitalism”, finally summarizes the American actor Ben McKenzie, claimed cryptoskeptic, who co-authors with Jacob Silverman Easy Money, an essay which traces the main cases of financial fraud and whose publication is planned in 2023.
Lobbying to limit regulation of the sector
For David Gerard, IT consultant and author in 2017 of Attack of the 50 Foot Blockchain, an incriminating essay against the blockchain, there is an urgent need to deconstruct the discourses 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”, “Initial coin offering” (ICO), consensus protocol… Crypto industry promoters also use terms that are both complex and vague, “which has the effect of obscuring their intentions and to slow down the action of regulators, “says law professor Edmund Schuster, professor at the London School of Economics.
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 for this activity.
The crypto-asset industry is indeed deploying significant lobbying efforts to delay or limit regulation of the sector. For this, it can count on “the financial support of powerful venture capital firms, like a16z or Paradigm in the United States”, underlines Amy Castor, very critical of the firm Andreessen Horowitz (a16z), whom she accuses of “lies” and “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.
An action that resonates with some political figures, who fervently defend the crypto-asset industry, like Republican Senator Cynthia Lummis in the United States. In the United Kingdom, the new Prime Minister, Liz Truss, has already spoken out in favor of limiting the supervision of the sector. In France, former deputy La Républiqe en Marche Pierre Person also expressed his enthusiasm for the crypto-asset industry, in a report dating from June.
Following the conference, some of the organizers therefore undertook what they saw as 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. A think-tank that intends to position itself as a counter-power against a powerful, organized and well-funded industry.