Senator Elizabeth Warren claims foreign ‘cryptocurrencies’ are being used to spy on the US.
US Senator Elizabeth Warren continues her anti-cryptocurrency campaign despite her weakening support base.
On July 25, she told a Senate Banking, Housing and Urban Affairs Committee hearing that foreign-owned cryptocurrency mining operations pose a national security threat.
Warren said:
“Foreign adversaries are using cryptominers to spy on U.S. military operations. This is a clear national security risk. But it’s not the only risk. Foreign-owned cryptominers also threaten our energy grid.”
The anti-cryptocurrency lawmaker further highlighted the environmental threat posed by these mining operations, noting that their activities could be “catastrophic for the environment.” She said:
“Foreign companies are increasingly setting up cryptocurrency mining facilities on U.S. soil. These mines are essentially warehouses filled with computers that process cryptocurrency transactions and produce new cryptocurrency tokens. They are noisy, hot, and suck up massive amounts of electricity that can take down the power grid. That’s why many countries have banned cryptocurrency mining.”
(Editor’s note: Bitcoin miners have been shown to be a net benefit to the grid through their ability to suppress demand, unlike Web2 and AI server farms that cannot be turned off. Additionally, Bitcoin miners can utilize surplus energy and waste energy when public demand decreases. Finally, unlike FIAT, Bitcoin energy usage is directly correlated to available resources without allowing for climate-abusing derivatives.)
Money laundering concerns
Warren also expressed concern about the way foreigners are acquiring cryptocurrency mines in the United States, noting that this poses enormous financial risks to the United States.
According to her, foreigners often purchase cryptocurrency mining with cryptocurrencies, thereby bypassing traditional banking systems and anti-money laundering regulations.
She added:
“Foreigners could secretly buy cryptocurrencies in the United States. How? By paying with crypto. Crypto allows them to bypass our traditional banking system and anti-money laundering regulations that are supposed to prevent anonymous foreign funds from flowing into the United States.”
Warren cited the example of a Chinese investor who secretly purchased a $6 million cryptocurrency mine in Texas using digital assets, adding that these foreign-owned mining facilities often use cryptocurrencies to funnel funds back to China.
So she urged Congress to enact stricter anti-money laundering laws to curb anonymous fundraising.
Thinning the support base
Warren’s anti-cryptocurrency base is shrinking as Republican Senator Roger Marshall withdraws support for the Digital Asset Anti-Money Laundering Act (DAAMLA).
Marshall, who co-sponsored the bill with Warren in 2022, withdrew his support on July 24, according to the official congressional roster, but 18 senators remain. I support this bill.
Warren argues that the bill is an attempt to bring the digital asset ecosystem into line with existing anti-money laundering systems. However, industry advocates have criticized the proposed bill, saying it is part of the lawmaker’s efforts to stifle the sector’s growth.
Marshall has not commented publicly on his decision, but some market experts believe it has to do with the growing importance of cryptocurrencies in the current election cycle.
