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The Evidence Standard
Nov/Dec 2021
The Evidence Standard
Speech and Debate provides a meaningful and educational experience to all who are involved.
We, as educators in the community, believe that it is our responsibility to provide resources
that uphold the foundation of the Speech and Debate activity. Champion Briefs, its employees,
managers, and associates take an oath to uphold the following Evidence Standard:
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2. We will never knowingly distribute information that has been proven to be inaccurate,
even if the source of the information is legitimate.
3. We will actively fight the dissemination of false information and will provide the
community with clarity if we learn that a third-party has attempted to commit
deception.
4. We will never knowingly support or distribute studies, news articles, or other
materials that use inaccurate methodologies to reach a conclusion or prove a point.
5. We will provide meaningful clarification to any who question the legitimacy of
information that we distribute.
6. We will actively contribute to students’ understanding of the world by using evidence
from a multitude of perspectives and schools of thought.
7. We will, within our power, assist the community as a whole in its mission to achieve
the goals and vision of this activity.
These seven statements, while simple, represent the complex notion of what it means to
advance students’ understanding of the world around them, as is the purpose of educators.
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Letter from the Editor
Nov/Dec 2021
Letter from the Editor
The resolution for Public Forum Debate for the months of November and December
2021 will be, “Resolved: Increased United States federal regulation of cryptocurrency
transactions and/or assets will produce more benefits than harms.” This topic excites me
because it should encourage both students and judges to learn more about the wild world of
cryptocurrency. Economics debates are far from uncommon, but this particular topic will
require debaters to immerse themselves in economic concepts they may not be familiar with.
Furthermore, the timeliness of this resolution is very interesting, given that the merits of
cryptocurrency regulation are being debated on a national and international level while crypto
markets continue to surge. For those reasons, I’m thrilled to see what y’all will come up with in
advance of our second topic of the season.
One of my favorite aspects of this topic is the unfamiliarity of the subject material. Given
that cryptocurrency has only become nationally relevant within the past decade or so, it may be
difficult to find studies or evidence that otherwise would be out there. Additionally, the
importance of timely sources increases on topics like this where the context is constantly
evolving day-by-day. Some resolutions allow for students to cite older evidence, but this
resolution will require you to be on top of your research continually throughout November and
December as the market fluctuates and new stories break on the matter.
The advice I would recommend all of you take to heart would be to be extremely clear
in your argumentation given the unfamiliarity of the subject matter. I elaborate on this in my
topic analysis, but many judges have only a baseline understanding of how cryptocurrency
works, so debates will quickly become confusing if your cases are not grounded in a way that
can be understood by laypeople. That being said, there are plenty of strange and interesting
arguments to be found on this topic – I encourage all of you to dive into this topic head-first,
because there is so much to be learned and discovered about these emerging currencies of the
future. Happy researching!
Michael Norton
Editor-in-Chief
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Table of Contents
Nov/Dec 2021
Table of Contents
The Evidence Standard ....................................................................... 5
Letter from the Editor ........................................................................ 6
Table of Contents ............................................................................... 7
Topic Analyses.................................................................................. 10
Topic Analysis by Jakob Urda.................................................................................................... 11
Topic Analysis by Michael Norton ............................................................................................ 18
Topic Analysis by Srikar Satish .................................................................................................. 26
General Information ......................................................................... 31
Pro Arguments ................................................................................. 41
PRO: Regulation of Cryptocurrency will protect consumers .................................................... 42
PRO: Regulation can limit criminal use and harms ................................................................... 46
PRO: Regulation of cryptocurrency will help legitimize it for greater use................................ 50
PRO: Regulation of Cryptocurrency will benefit cryptocurrency.............................................. 55
PRO: Regulation of cryptocurrency benefits businesses .......................................................... 59
PRO: US gov should increase regulations on cryptocurrency assets and/or transactions
through firm taxation policy ..................................................................................................... 63
PRO: US gov should increase regulations on cryptocurrency assets and/or transactions sent
abroad ...................................................................................................................................... 68
PRO:US gov should increase regulations on cryptocurrency to prevent hacking..................... 73
PRO: US gov should increase regulations on cryptocurrency to prevent negative
environmental impacts............................................................................................................. 77
PRO: US gov should increase regulation utilizing central bank digital currencies .................... 81
PRO: Regulation is good economically ..................................................................................... 85
PRO: Regulation is preferable to an outright ban .................................................................... 88
PRO: Regulation has bipartisan support ................................................................................... 91
PRO: Effective Regulation ......................................................................................................... 94
PRO: Energy waste ................................................................................................................... 97
Pro Responses to Con Arguments ................................................... 101
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Table of Contents
Nov/Dec 2021
A/2: Politics.............................................................................................................................102
A/2: Neoliberalism ..................................................................................................................107
A/2: Regulation grows Crypto causing negative side effects..................................................122
A/2: Courts .............................................................................................................................132
A/2: Regulation is risky ...........................................................................................................143
A/2: Regulation is politically toxic ..........................................................................................146
A/2: Crypto is too heterogenous ............................................................................................149
A/2: Crpyto should be outright banned, not regulated ..........................................................152
A/2: Regulation will be ineffective .........................................................................................155
A/2: Unjust Taxation ...............................................................................................................158
A/2: Regulation will spur more dangerous alternatives .........................................................161
A/2: Worsens vulnerabilities ..................................................................................................164
A/2: Cryptocurrencies are good for the environment ............................................................167
A/2: Centralizing cryptocurrency is dangerous ......................................................................170
A/2: Regulation will inspire political backlash ........................................................................173
Con Arguments .............................................................................. 176
CON: Politics ...........................................................................................................................177
CON: Neoliberalism ................................................................................................................190
CON: Regulation grows crypto causing negative side effects ................................................203
CON: Courts ............................................................................................................................208
CON: Regulation is risky..........................................................................................................214
CON: Regulation is politically toxic .........................................................................................218
CON: Crypto is too heterogeneous .........................................................................................221
CON: Crypto should be outright banned, not regulated ........................................................224
CON: Regulation will be ineffective ........................................................................................228
CON: Unjust taxation ..............................................................................................................232
CON: Regulation will spur more dangerous alternatives .......................................................237
CON: Worsens vulnerabilities .................................................................................................241
CON: Cryptocurrencies are good for the environment ..........................................................244
CON: Centralizing cryptocurrency is dangerous .....................................................................248
CON: Regulation will inspire political backlash.......................................................................252
Con Responses to Pro Arguments ................................................... 255
A/2: Regulation of Cryptocurrency will protect consumers ...................................................256
A/2: Regulation can limit criminal use and harms ..................................................................260
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Table of Contents
Nov/Dec 2021
A/2: Regulation will help legitimize cryptocurrency for its greater use .................................264
A/2: Regulation of cryptocurrency will benefit cryptocurrency. ............................................268
A/2: Unregulated cryptocurrency benefits businesses ..........................................................272
A/2: US gov should increase regulations on cryptocurrency assets and/or transactions
through firm taxation policy ...................................................................................................275
A/2: US gov should increase regulations on cryptocurrency assets and/or transactions sent
abroad ....................................................................................................................................280
A/2: US gov should increase regulations on cryptocurrency to prevent hacking...................284
A/2: US gov should increase regulations on cryptocurrency to prevent negative
environmental impacts...........................................................................................................288
A/2: US gov should increase regulation utilizing central bank digital currencies ...................292
A/2: Regulation is good economically ....................................................................................296
A/2: Regulation is preferable to an outright ban ...................................................................300
A/2: Regulation has bipartisan support ..................................................................................303
A/2: Effective Regulation ........................................................................................................306
A/2: Energy Waste ..................................................................................................................310
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Topic Analysis by Jakob Urda
Nov/Dec 2021
Topic Analysis by Jakob Urda
Resolved: Increased United States federal regulation of cryptocurrency transactions
and/or assets will produce more benefits than harms.
Introduction
The November/December topic spans a wide range of political, economic, and social
questions. Cryptocurrency is a new and emerging field that constantly develops new
applications and end-uses. The novelty is inevitably being transformed into functionality as the
technology develops and matures. As cryptocurrencies become increasingly mainstream
societies around the world must ask themselves how to regulate this new field. The stakes are
potentially massive, cryptocurrencies already have a 2 trillion-dollar market cap and will only
grow more in the future. They account for a massive amount of energy production and storage,
and new and disruptive applications are constantly being developed. There are few questions
more important than how to govern the future of this market.
This topic will require debaters to juggle probabilities and risks in a way that few other
topics do. Not many of the ultimate impacts of cryptocurrencies are visible yet because the
technology is so new and fast-growing. This means that debaters must first speculate about the
ultimate development of the issue and then weigh the probabilities that any one scenario will
play out. This is on top of the typical challenges around foreseeing the implementation of a
complex policy topic. As such, the teams which perform the best will not only have erudite
understandings of what crypto is and how it functions but also the persuasive ability to
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Topic Analysis by Jakob Urda
Nov/Dec 2021
convince the judge that their vision of the future is the most likely to become reality. This is
especially hard on a topic where too many of the links sound like science fiction. Being visionary
and yet reasonable will be the winning combination that will allow debates to be truly
convincing to their judges.
Background
Cryptocurrency is often said to have started in 2009, with the invention of Bitcoin.
Bitcoin was invented by someone named Satoshi Nakamoto, whose real identity is unknown to
the public. The central technology in bitcoin and cryptocurrencies more broadly is the
blockchain. The blockchain is a public ledger that records and stores all prior transactions and
activities. This allows owners and transactors to be validated in real-time, preventing fraud or
counterfeiting. Nakamoto developed the process known as "mining" through which computers
perform complex mathematical equations to create new bitcoins and record transactions on
the blockchain.
These ideas are central to cryptocurrency's value proposition of decentralized control –
the idea that no individual or central bank has a monopoly on the currency or can manipulate
its value. Instead of a national bank setting supply and regulating value, these factors are
controlled by the activities of their users and the protocols written into the code of the specific
blockchain. For example, many cryptocurrencies have a hard cap on the amount of currency
that can ever exist written into their code.
To run and sustain cryptocurrencies, miners run massive computer centers which create
new copies of the blockchain and verify transactions in return for brand new units of the
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Topic Analysis by Jakob Urda
Nov/Dec 2021
cryptocurrency. These mining operations are power and hardware-intensive, so many of them
are now run by fairly large firms which strategically locate themselves by sources of cheap
electricity and space.
As cryptocurrency began to grow, alternatives to Bitcoin were developed and released.
Ethereum is the second most popular cryptocurrency. Ethereum is popular because it can be
used to power "smart contracts" which are special transactions that have rules built into them.
This helps ensure that payment is automatic after the completion of service and that disputes
between parties are automatically mediated. Other popular cryptocurrencies include Ripple,
which is used for international money transfers, and Litecoin which is meant to speed up the
blockchain creation time compared to Bitcoin.
One of the most important stories in the news about cryptocurrencies today is the rise
of Dogecoin. Dogecoin is a re-skinned version of Litecoin covered in comic sans font and a Shiba
Inu dog. It markets itself as a "fun" cryptocurrency with few pretensions of actual economic
utility. Dogecoin was created without a ceiling on the number of coins that could be created,
making it inherently inflationary with a diminishing value over time. However, in 2020
Dogecoin's value surged for reasons seemingly unrelated to any intrinsic economic value. By
2021, the value had surged over 20,000% in the year. The total market capitalization of
Dogecoin is nearly 55 billion dollars. Importantly, the currency's rise has not been monolithic, it
has been incredibly volatile, which has caused large financial losses to investors who have
bought and sold the currency at the wrong time. Following this extreme volatility and seeming
lack of value, regulators have increasingly called for the scrutiny of crypto assets.
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Topic Analysis by Jakob Urda
Nov/Dec 2021
Strategy Considerations
Both sides must grapple with the question of inherency on this topic. Inherency is the
idea that the resolution does not spell out all of the changes which happen when the resolution
is enacted. Inherency means debating the topic as it would happen if it were to be affirmed in
the real world, that is to say, looking at the most likely implementation of the topic. The
resolution is vague and does not cover every aspect of the topic such as the budget. Therefore
many crucial aspects of the topic will have to be decided by the debaters in the round itself. The
debate over inherency sets the terrain for the rest of the round.
The biggest inherency question of this resolution is what the word "regulation" means
and would look like if enacted. Would it be strict or loose, tax-based or reporting-related,
voluntary or mandatory? Regulation is an incredibly broad idea that spans an entire field of law.
How the regulation is enacted will be just as determined as the decision of whether or not to
regulate at all. Debaters who wish to succeed on this topic must start by asking themselves
about inherency.
The second controlling question is how to evaluate the tradeoff between volatility and
growth. The crypto market has been characterized by high volatility and high growth since its
inception. The former has been typically seen as highly undesirable but the latter has generally
been held to be a social good. The question is therefore whether these two phenomena are
causally and necessarily linked. Can crypto have fast growth without volatility? Maybe. But
many worry that containing volatility would mean repressing the forces of creative destruction
which feed the innovation in the crypto space. This might be a cost that is worth paying to tamp
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Topic Analysis by Jakob Urda
Nov/Dec 2021
down volatility, but maybe not. This is the key tradeoff question on which many rounds will
center on.
Affirmative Argumentation
Teams in the affirmative should try to play up the harms of volatility and downplay the
harms to growth and innovation. The world which the pro advocates for should be where the
government can guide crypto innovation safely and productively.
Pro teams can play up the economic harms of volatility by emphasizing that many of the
victims of crypto crashes are ill-positioned to afford such as loss. With the rapidly growing
popularity of consumer cryptocurrency platforms such as coin base and crypto offerings on
mainstream investing platforms like Robinhood, many ordinary people have begun buying
crypto. These "retail investors" can invest large amounts of their money in crypto, especially
during periods of "hype" or rapid growth. This makes small investors susceptible to debilitating
market crashes which can wipe out large amounts of their savings.
Pro teams should also remember to emphasize the limited downsides of regulation. To
do this, pro teams should call upon other industries which are heavily regulated and yet still
productive. Finance, tech, and automobiles are all highly regulated industries with several
overlapping federal bureaucracies which govern their actions. Yet America manages to have
world-beating firms in all three sectors. This should be a testament to the fact that regulation
does not break innovation.
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Topic Analysis by Jakob Urda
Nov/Dec 2021
Negative Argumentation
Negative teams need to show that regulation would make the crypto market worse off
than it is now. This is a difficult task because many judges do not see any tangible benefits of
crypto, owing to its newness. As such, negative teams must argue that regulation will trade off
with future benefits. This means first establishing the existence of future benefits and then
establishing how regulation would prevent the actualization of those benefits.
Teams looking to convince judges of the benefits of crypto should search for ambitious
and pathbreaking use-cases which serve as examples of how crypto could transform the
economy. For example, smart contracts could more easily resolve housing disputes and
decrease the need for expensive litigation. A few of these examples would be a strong proof of
the concept of crypto's future value. Importantly, debaters should emphasize that these
examples are not the benefits themselves, instead, they are just examples of the many yetunseen ways in which crypto can change the entire economy for the better. The applications for
electricity and the internet took a long time to develop, crypto is in the same nascent stage.
Then, debaters must argue that regulation would be destructive for this innovation and
thereby prevent the benefits from materializing. Debaters can do this by looking at societies
that were slow to adopt information technology because of high regulatory burdens or
prevented their financial services sector from growing. Societies that were late to industrialize
suffered immensely from lost productivity gains. Con teams must make the case that America
cannot afford to miss out or even delay pathbreaking new technologies.
This topic is expansive and touches important aspects of politics and economic
s. Debaters must delve deeply into the research to succeed. Good luck!
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Topic Analysis by Jakob Urda
Nov/Dec 2021
About Jakob Urda
Jakob grew up in Brooklyn, New York. He attends the University of Chicago, where he
will receive a BA in Political Science, and is interested in security studies and political economy.
Jakob debate for Stuyvesant High School where he won Blake, GMU, Ridge, Scarsdale,
Columbia, the NCFL national championship, and amassed 11 bids. He coached the winners of
the NCFL national tournament, Harvard, and Blake.
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Topic Analysis by Michael Norton
Nov/Dec 2021
Topic Analysis by Michael Norton
Resolved: Increased United States federal regulation of cryptocurrency transactions
and/or assets will produce more benefits than harms.
Introduction
Cryptocurrency regulation is a topic that has been in the news for a while now, though
it’s a subject that remains a mystery to a number of debaters, Americans, and even members of
congress. As cryptocurrencies, ranging from Ethereum and Bitcoin to meme coins like Dogecoin,
have taken off, the government has been somewhat slow to respond. Today, cryptocurrency is
a trillion-dollar market, yet there have been very few laws put in place to regulate its usage.
Critics have pointed out that while these coins have proven useful, they require immense
amounts of energy to maintain, and they have been used disproportionately by organized crime
syndicates. Politicians need to decide what the role of the government is with regards to these
potential issues, and whether they are even capable of regulating a third-party currency.
This resolution is interesting because there is very little precedent concerning
cryptocurrency regulation. The first cryptocurrencies that truly gained relevance only emerged
around 2009, meaning that this topic is still fairly fresh. Debaters will need to chart their own
course when arguing over what cryptocurrency regulation would even look like. There are some
examples internationally, like China's recent decision to ban all crypto-related transactions, but
reasonable examples are hard to find. Being clear about what cryptocurrency regulation would
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Topic Analysis by Michael Norton
Nov/Dec 2021
realistically look like in the United States will therefore be crucial - on a topic where many
people are still learning about the subject matter, the best strategy will be simplicity and clarity.
Background
When Bitcoin first emerged around the turn of the decade, it gained a strong following
in some online circles, but the public was still largely unaware of the oncoming cryptocurrency
surge. Primarily, Bitcoin holders were individuals looking to speculate on what they thought
was going to be the next big thing - and they were proven right to a certain extent when values
skyrocketed over time. Today, Bitcoin has been joined by a number of other coins, all
advertising a unique benefit of some kind. Cryptocurrency has become an enormous industry,
composed of trading firms and large-scale mining farms as opposed to individual coin holders
from the beginning. Even giants like Tesla have enormous stakes in cryptocurrency, proving that
the industry has become nationally relevant.
The rise of cryptocurrency has also been accompanied by an array of questions about
how sustainable they truly are. Many cryptocurrencies rely on a process known as mining,
which requires many computers to expend a tremendous amount of energy, to function. The
scale of this energy usage is far beyond expectation - cryptocurrency mining alone accounts for
the same amount of energy usage as some small to midsize countries. Additionally,
cryptocurrency has played a large role in organized crime online - particularly in online drug
marketplaces like the Silk Road. As such, many look down on cryptocurrency as little more than
a fad; a tool used by futurists that will inevitably be replaced by the next online trend.
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Topic Analysis by Michael Norton
Nov/Dec 2021
Modern cryptocurrencies have evolved from what they were at the turn of the decade.
Bitcoin and the currencies that followed it have improved their reputation in a number of ways,
and some cryptocurrencies are working on ways to address the energy usage concerns. Despite
these evolutions, the industry remains opaque and largely uncontrolled. Regulators must
consider whether these cryptocurrencies are legitimate and whether they can be allowed to
continue to market themselves however they like.
Strategy Overview
When approaching this resolution, the most important consideration would be the
burdens of the resolution. The topic requires pro teams to defend federal government
cryptocurrency regulations, but it doesn't expressly state what those regulations would entail.
As a result, the burden is on affirmative teams to establish what that scenario would reasonably
look like. The difficulty with that will be arguing over what will realistically happen with regard
to regulation. The costs and benefits of cryptocurrency are a central aspect of the debate, but
the pro cannot win if they can't prove that the government will be able to effectively regulate.
This is why the Pro must be realistic when arguing about what they believe regulations would
entail - they cannot pick and choose policies as they wish, and debate about the merits of
those. Instead, debaters must warrant why they believe their policy would happen, and
subsequently they must prove whether that policy would be good or bad. Conversely, this gives
Con teams a lot of ground, because they can win either by proving that cryptocurrency
regulation is bad inherently, or they can win by proving that the United States government
would do so in a bad way.
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Topic Analysis by Michael Norton
Nov/Dec 2021
The most crucial stylistic consideration for this topic would be your approach to
explaining your arguments. Keep in mind that while many Americans are aware of
cryptocurrency, they may still have not encountered much information about how they work,
and what regulation would entail. Even many members of Congress don't understand the
nature of cryptocurrency - Ted Cruz recently claimed that "There aren't five senators in this
body with any real understanding of how cryptocurrency operates." The reason this is
important is that your judge in many cases may not fully understand what blockchain is, what
currency mining is, and other things of that nature. Presenting your arguments in a
straightforward manner, without overcomplicating them with useless jargon, is probably the
best way to connect with the average judge that you will encounter.
Another consideration for debaters will be the timeliness of the resolution. Throughout
the time that this resolution is being debated, there will likely be fluctuations in the number of
prominent and emerging coins. Cryptocurrency is still an extremely volatile market, and a lot of
new research is still being published on the matter. As such, it's important to avoid reliance on
older evidence, because the world of cryptocurrency changes so quickly, and arguments can
become irrelevant fairly quickly.
Affirmative Argumentation
The vision of the Pro should not be a world without cryptocurrency, but rather a world
where cryptocurrency is improved and enhanced by regulations imposed by the U.S.
government. As mentioned previously, this will require teams to establish two things - the risks
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Topic Analysis by Michael Norton
Nov/Dec 2021
of cryptocurrency moving forward, and the potential for the U.S. government to effectively
regulate.
With that in mind, Pro teams can make the argument that cryptocurrency will flourish
under government regulation. Unregulated cryptocurrency carries a number of risks that make
it impractical for businesses to use it. If cryptocurrency is regulated, this will legitimize it in the
eyes of the public, and it will become easier for businesses to hold and exchange them safely.
Furthermore, as cryptocurrency becomes safer to use through regulation, it would likely
become easier to use for the general public. If cryptocurrency becomes more accessible and
more widespread, that will only amplify the benefits that Con teams will likely bring up with
regard to cryptocurrency today.
Similarly, Pro teams should highlight how the lack of regulation has created a high
degree of volatility. Cryptocurrencies have fluctuated wildly in value over time, with some
currencies emerging purely based on popularity like Dogecoin for example. Rapid periods of
growth caused by online hype have made it challenging for investors to determine the true
value of cryptocurrencies, and coin holders are often left to deal with the aftermath when the
value inevitably crashes. Pro teams should argue that regulation can help to prevent these wild
fluctuations, and stabilize the currencies in the long term.
The criminal aspect of cryptocurrencies should not be ignored by Pro teams either. For
years, online criminals have primarily used cryptocurrencies because they allow them to
maintain a degree of anonymity. Their unregulated nature allows for criminals to hide in plain
sight, as we’ve seen with some online drug markets like the aforementioned Silk Road.
Furthermore, there have been a number of high-profile hacking incidents that resulted in a loss
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Topic Analysis by Michael Norton
Nov/Dec 2021
of public confidence in cryptocurrencies. If Pro teams can conclusively prove that regulation can
help to mitigate these issues, they argue that cryptocurrency will be safer and more successful
in the future.
Environmentally, the current impact of cryptocurrency is unsustainable. Mining Bitcoin
and other cryptocurrencies require an immense amount of electricity, which often means
burning fossil fuels. If cryptocurrency is allowed to continue to grow without regulation, the
environmental impact will continue to balloon out of control. The U.S. government can impose
restrictions on the amount of energy that can be used for currency mining, which would
incentivize innovators to find a less energy-intensive way forward. Climate change arguments
grant access to enormous impacts, and the links to those arguments are fairly straightforward.
The challenge with this argument is proving that emissions and consumption would
meaningfully decrease, which may be a difficult task in a 40-minute debate round.
Negative Argumentation
The Con is in somewhat of a difficult position in the sense that they need to argue that
cryptocurrency is both valuable and better off without regulation. Approaching this topic, I'd
argue that the best approach for Con teams would be to point out that regulation will not work.
As mentioned previously, many members of Congress are not familiar with Cryptocurrency and
do not understand the implications of any regulation they may put in place. Moreover, there
are other examples of governments attempting to regulate cryptocurrency in good faith, only
for that effort to fail. Con teams can also point to the general ineffectiveness of Congress as
proof of their inability to regulate cryptocurrency.
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Topic Analysis by Michael Norton
Nov/Dec 2021
The downsides of regulation are also crucial to any winning Con strategy. Con teams can
highlight how the Crypto-industry has been reactive to consumer concerns, and how it has
become more legitimate and innovative with time. Regulation would slow that innovation, and
prevent developments that could spur growth or positive change. Overall, I would highlight the
trends of cryptocurrency rather than the state the industry is in now - while cryptocurrencies
have issues today, they are trending towards fixing them as they gain prominence and become
subject to public scrutiny.
Concluding Thoughts
Cryptocurrency is a foreign subject to most of you reading this brief, and to the
overwhelming majority of judges, you will encounter while debating. As such, the piece of
advice that I hope you take to heart would be to explain all of your arguments as thoroughly
and clearly as possible. Do not make any assumptions about what somebody may know on the
subject, and avoid technical terms when possible. This is not to say that you can't make
complex arguments, but rather you should put those arguments in a context that anybody can
understand by fully impacting your arguments.
About Michael Norton
Michael Norton is the Editor in Chief of the Public Forum Brief at Champion Briefs. He
has been involved with Public Forum since 2009. He has worked with thousands of students
across many sessions of summer camp and many semesters of class. As a competitor, Michael
won the Sunvitational, Manchester Essex Invitational, Blake Invitational, Harvard Invitational,
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Topic Analysis by Michael Norton
Nov/Dec 2021
and the Harvard Round Robin. He also had a successful collegiate debate career, finishing
among the top four teams at the American Parliamentary Debate Association’s national
tournament and semifinaling at the North American Universities Debating Championship. While
Michael places a premium on success, he has stayed in the debate community because he
knows that debate can change anybody’s life if they give it a real shot.
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Topic Analysis by Srikar Satish
Nov/Dec 2021
Topic Analysis by Srikar Satish
Resolved: Increased United States federal regulation of cryptocurrency transactions
and/or assets will produce more benefits than harms.
Introduction
So, everyone is very happy that the NSDA decided to not listen to the student vote yet
again, but don't fret! This topic is very similar strategy-wise to the other topic. Some
considerations before diving into the topic, this topic is extremely technical, and if you are not
careful, you could lose lay judges very easily. Thus, it is important to have a deep knowledge of
the topic to the point where you don’t overcomplicate issues. Like every econ topic, the
uniqueness/inherency is constantly switching, so make sure you’re scanning the news and
stocks for any updates
With Florida Blue Key now being on the November topic, combined with the recent
circuit meta, teams should expect people to have techier cases prepared to go. I suspect due to
the prevalence of this topic in 2020 policy and multiple college policy topics in the past, many
teams will opt for running extinction cases. With the prominence of Anti Money Laundering
cases at TOC last year, I suspect that money laundering will be a big focus of this topic.
Background
I'll keep this one brief as I'm sure this will be substantially touched upon. Cryptocurrency
started in 2009 with the advent of bitcoin and grew in popularity. This was due to the status it
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Topic Analysis by Srikar Satish
Nov/Dec 2021
had as a decentralized currency, where no bank or government had control of its flow. The US
in the past has been supporting it, and even recently, bitcoin became one of the official
exchanges of the IMF. Essentially, Crypto turned into a quick way to "get rich" and many people
started heavily investing in it. Now, Cryptocurrencies are becoming far more widespread in the
United States, and there has been a recent rise of criminal use of bitcoin within the United
States, especially prevalent in drug cartels.
This debate will come down to 3 scenarios, I think. A link-level scenario of uncertainty
on neg vs market regulation on aff, an impact debate of crypto bad vs good, or a debate of AFF
terrorism vs the econ impacts of the neg. I think this level of stock makes it easy for debaters to
prep out and pre-write everything needed in debates excluding debaters that read more
nuanced and squirrely arguments.
Topic Wording
The Neg technically must prepare 3 resolutions due to the "and/or" in this resolution, as
the aff can choose to defend just assets, transactions, or both. Thus, the neg needs to have
generic Das, that link into all of those. This also could be a form of probability, where teams
must prove is the most probable implementation of the resolution.
The second is the "more benefits than harms". K teams start licking your lips because
finally no neg status burden. I.e.- one does not need to prove that status is good / status quo
solves just that increased regulations are bad, not due to the lack of the word "should". Yes,
this is true for most K, but this topic makes it SUPER easy to understand with its wording. You
can argue that "increased" has already happened, and rather the resolution isn't asking you to
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increase it more, it is asking you to critique the resolution. Is increasing crypto regulation a
good idea – you don't need to argue some link chain u just say the impact of the K outweighs it.
This means the K in PF doesn't need to worry about how to deal with the alt. Aka – you could
read your normal K with most PF judges thinking of it as a normal DA, allowing for maximum
adaptation.
Regulation is another major word here. Technically, the Security and Exchange
Commission is responsible for regulating crypto, even though most AML stuff is done by the
DOTJ. This is very important, as many DAs that people read will link into generic crypto or
generic “regulation”, but the SEC could do a lot to change that.
"United States Federal" is super important. First, it basically alt causes more of the
terrorism scenarios because most of the bitcoin for it is not held within the US, and thus unless
the aff team argues a spillover scenario or some sort of bitcoin collapse scenario, I don't see
them winning a major link. Secondly, it doesn't explicitly specify the government like most
other USFG scenarios. This means if you could prove probable implementation, you could pick
an agency that is likely to regulate crypto and avoid a lot of Neg DAs.
I think the fact this resolution is worded not in the "USFG should" is significant as well. It
implies that the burden of proof is for the aff to defend the existing increase to crypto
regulations and the neg to say this increased regulation could be problematic. Thus, I don't
think the AFF is fiating certain actions. This could allow teams to read bill-specific DAs, such as
reading advantages or DAs on specific regulations that are occurring now.
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Affirmative Argumentation
I think the aff has many possible ideas. There are tons of soft-left positions, and I think
the AFF teams should investigate those as they might be highly strategic arguments. I think the
aff team needs to choose between two ideas- if they want to defend the bitcoin increase or
not. I think there is a lot of evidence on why affirming leads to a growth in bitcoin, and then the
aff can choose to defend that, or to simply argue whether the regulation of such bitcoin is good.
I think the aff should research some existing regulation that is occurring and defend that. There
are a lot of status quo benefits of this, and thus, the AFF I think could adopt the burden of the
status quo. I think the aff should again investigate defending this, but also looking to either
defend transactions or assets. If you could find an argument that the stock neg links about
uncertainty won't link into, you're set to bid on this topic!
Negative Argumentation
Similar to the aff, you need to find an argument where your DA links into most of the
time. I think this position is what most K debaters will enjoy. You have a resolution about
literally increasing state involvement. This basically can act as a link to most args out there. I
think the K teams need to think about how they will win the soft left aff links. A good example
of this is a form of neoliberalism aff where they say, “government regulation of markets yay”
and the Neg argues about some co-opt. The weighing needs to be very clear about why the neg
is winning otherwise it will turn into a wash where it’s way harder for judges to decide.
I think the stock neg however needs to make the same decision of how to proceed as
the AFF. The neg first needs to decide this path, and then make sure that it can link into much
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of the AFF arguments on this topic. To be honest, this resolution seems AFF skewed, but with
solid Disadvantages and prep work, it isn’t a problem at all!
Concluding Remarks
I know this was a technical topic analysis going into techier topics. Given the judging, in
the past few months, I think it is strategic for teams to keep a complex "tech" case and a
simpler "lay" case. One distinction needs to be made – just because you read complicated
arguments doesn't mean that your analysis should be complicated. The simpler you keep econ
topics, the better they go!
I wish y'all the best of luck and hopefully, your competitions go well!
About Srikar Satish
Srikar is currently studying International Politics and Diplomacy at Texas A&M
University. In high school, Srikar debated for A&M Consolidated being ranked as high as 2nd
nationally in his senior year, obtaining 3 bids, a round-robin final appearance, and quarters at
both the TFA state and the NDCA national tournament, and locally placed 3rd at his policy state
tournament. Srikar has coached students to over 5 bids in less than a year of coaching and
currently works at the Potomac Debate Academy.
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General Information
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General Information
Resolved: Increased United States federal regulation of cryptocurrency transactions
and/or assets will produce more benefits than harms.
Foreword: We, at Champion Briefs, feel that having deep knowledge about a topic is just as
valuable as formulating the right arguments. Having general background knowledge about the
topic area helps debaters form more coherent arguments from their breadth of knowledge. As
such, we have compiled general information on the key concepts and general areas that we feel
will best suit you for in- and out-of-round use. Any strong strategy or argument must be built
from a strong foundation of information; we hope that you will utilize this section to help build
that foundation.
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What is Cryptocurrency
According to Investopedia1,
“A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it
nearly impossible to counterfeit or double-spend. Many cryptocurrencies are decentralized
networks based on blockchain technology—a distributed ledger enforced by a disparate
network of computers. A defining feature of cryptocurrencies is that they are generally not
issued by any central authority, rendering them theoretically immune to government
interference or manipulation.
Cryptocurrencies are systems that allow for secure payments online which are denominated in
terms of virtual "tokens," which are represented by ledger entries internal to the system.
"Crypto" refers to the various encryption algorithms and cryptographic techniques that
safeguard these entries, such as elliptical curve encryption, public-private key pairs, and
hashing functions.”
1
https://www.investopedia.com/terms/c/cryptocurrency.asp
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What are the Different Types of Cryptocurrencies?
There are a wide variety of cryptocurrencies on the market serving distinct use-cases. The most
prominent cryptocurrency is Bitcoin. According to Forbes:
“Bitcoin is built on a distributed digital record called a blockchain. As the name implies,
blockchain is a linked body of data, made up of units called blocks that contain information
about each and every transaction, including date and time, total value, buyer and seller, and a
unique identifying code for each exchange. Entries are strung together in chronological order,
creating a digital chain of blocks.
In order for a transaction block to be added to the Bitcoin blockchain, it must be verified by the
majority of all Bitcoin holders, and the unique codes used to recognize users’ wallets and
transactions must conform to the right encryption pattern.”2
There are many alternatives to Bitcoin, each with a different focus and competitive advantage.
According to Investopedia:
“The first Bitcoin alternative on our list, Ethereum is a decentralized software platform that
enables smart contracts and decentralized applications (dapps) to be built and run without any
downtime, fraud, control, or interference from a third party. The goal behind Ethereum is to
create a decentralized suite of financial products that anyone in the world can freely access,
regardless of nationality, ethnicity, or faith.2 This aspect makes the implications for those in
some countries more compelling, as those without state infrastructure and state identifications
can get access to bank accounts, loans, insurance, or a variety of other financial products.
[Another cryptocurrency,] Stellar is an open blockchain network designed to provide enterprise
solutions by connecting financial institutions for the purpose of large transactions. Huge
transactions between banks and investment firms—typically taking several days, involving a
number of intermediaries, and costing a good deal of money—can now be done nearly
2
https://www.forbes.com/advisor/investing/what-is-bitcoin/
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instantaneously with no intermediaries and cost little to nothing for those making the
transaction.”
Why are People Calling for the Regulation of Cryptocurrencies?
Public figures have begun to call for the regulation of cryptocurrencies because of risks posed
by the asset class including volatility and use in cybercrime. The Biden administration in
particular has issued calls to regulate cryptocurrencies. According to Time Magazine:3
“The Biden Administration is looking to crack down on tax evasion, and pointing to
cryptocurrency as a big area of concern. The U.S. Treasury last week announced proposed
3
https://time.com/nextadvisor/investing/cryptocurrency/us-treasury-crypto-stance/
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changes to cryptocurrency reporting as part of President Joe Biden’s proposed American
Families Plan.
The plan would implement a new rule for businesses and crypto exchanges, requiring them to
report any cryptocurrency transactions with a fair market value of $10,000 or more to the IRS.
That’s the same amount currently required for cash deposits. If you deposit more than $10,000
into your checking account, for example, your bank is required to report that to the federal
government.
The report says cryptocurrency “poses a significant detection problem by facilitating illegal
activity broadly including tax evasion.” “Better regulation will benefit crypto investors, further
the development of new technologies, curtail the use of crypto-assets used for illicit payments,
and reduce the risk of cyber attacks, which can result in collateral damage elsewhere in our
financial system,” according to a 2019 report on crypto regulation from Brookings Economic
Studies.”
The federal system for regulating cryptocurrencies is still nascent and underdeveloped. Time
continues that:
“U.S. Treasury Secretary Janet Yellen recently said there’s not yet an “adequate framework” for
tackling cryptocurrency regulation in the United States — though she believes it’s a topic worth
addressing — in response to a question about regulating crypto at the Wall Street Journal’s CEO
Council Summit.
As recently as 2020, the IRS added a cryptocurrency question to Form 1040 for taxpayers to
report capital gains and losses on crypto transactions. That addition alone speaks to how
important an issue this is for the government, Gordon says. “I think we’re just going to continue
to see more enforcement, but hopefully along the way some more clarity as well.””
The uncertainty and anticipation of upcoming regulations is one of the most important issues in
the cryptocurrency community. Crypto analysts consistently rate regulation as a top issue for
determining the future viability of cryptocurrencies.
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What Could Regulation Look Like?
The United States is not the only country to deal with cryptocurrency regulation. Many
countries have adopted regulatory schemes with varying degrees of scrutiny. Some countries
have banned cryptocurrencies while others treat it with as little regulation as possible. Here are
some examples of countries adopting cryptocurrency regulation:4
•
“The European Union: The EU has been in the limelight as it is one of the initial
countries to make cryptocurrency legal across the EU. Nonetheless, there is no specific
regulation passed by the EU that governs crypto activities. But, The 5th AML Directive
directs that crypto exchanges follow the EU’s anti-money laundering regulations.
4
https://www.analyticsinsight.net/a-rundown-of-cryptocurrency-regulations-across-the-world/
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Nov/Dec 2021
Singapore: Singapore has been at the forefront of technology adoption and
advancement. Similarly, with regards to crypto, the country has reflected a positive
attitude. Lately, Blockchain and Cryptocurrency Regulation, 2020 was signed to regulate
cryptocurrency and accelerate its adoption.
•
Australia: Cryptocurrency exchanges are very much legal in this country. Since they are
legal, Australia’s government has subjected cryptocurrency to Anti-Money Laundering
and Counter-Terrorism Financing Act 2006 (AML/CTF 2006), section 5, and associated
rules. Also, cryptocurrency is treated like property here and is subject to Capital Gains
Tax (CGT).
•
Japan: Japan’s Financial Services Agency (FSA) governs all the cryptocurrency trading
platforms in Japan. Further, Japan legalized cryptocurrency in 2017 under the Payment
Services Act.
•
Canada: Following the path of the USA, Canada to is quite positive towards crypto
adoption. Crypto transactions are legal in Canada and are treated as a commodity,
hence, classified as business income. Firms dealing with cryptocurrencies are supposed
to register themselves with the Financial Transactions and Reports Analysis Centre of
Canada (FINTRAC).”
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Works Cited
Ashford, Kate. “What Is Cryptocurrency?” Forbes, Forbes Magazine, 15 Sept. 2021,
https://www.forbes.com/advisor/investing/what-is-cryptocurrency/.
Frankenfield, Jake. “What Is Cryptocurrency.” Investopedia, Investopedia, 28 Sept. 2021,
https://www.investopedia.com/terms/c/cryptocurrency.asp.
Haar, Ryan. “Latest Crypto Regulation Talks .” Time, Time, 1 Oct. 2021,
https://time.com/nextadvisor/investing/cryptocurrency/crypto-regulation-talks-heatup/.
Silverman, Gary, and Stefania Palma. “Crypto Products Offering Returns Cannot Avoid
Regulation, Says SEC Boss.” Financial Times, Financial Times, 30 Sept. 2021,
https://www.ft.com/content/3e8f6c2f-6580-40f6-b6df-3368bb5f20d1.
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PRO: Regulation of Cryptocurrency will protect consumers
Significance: Cryptocurrency is not currently backed or insured leaving consumers at risk.
Federal Trade Commission.“What to Know about Cryptocurrency and Scams.” FTC.gov:
Consumer Information, 26 July 2021,
https://www.consumer.ftc.gov/articles/what-know-about-cryptocurrency-andscams.
There are important differences between cryptocurrency and traditional currency.
Cryptocurrency accounts are not backed by a government. Cryptocurrency accounts
are not insured by a government like U.S. dollars deposited into a bank account. If you
store cryptocurrency with a third-party company, and the company goes out of
business or is hacked, the government has no obligation to step in and help get your
money back. Cryptocurrency values change constantly. The value of a cryptocurrency
can vary rapidly, even changing by the hour. It depends on many factors, including
supply and demand. An investment that’s worth thousands of dollars today might be
worth only hundreds tomorrow. And, if the value goes down, there’s no guarantee it
will go up again. Cryptocurrency payments do not come with legal protections. Credit
cards and debit cards have legal protections if something goes wrong. For example, if
you need to dispute a purchase, your credit card company has a process to help you get
your money back. Cryptocurrencies typically do not.
Cryptocurrency payments typically are not reversible. Once you pay with
cryptocurrency, you can usually only get your money back if the person you paid sends
it back. Before you buy something with cryptocurrency, know the seller’s reputation,
where the seller is located, and how to contact someone if there is a problem. Confirm
these details by doing some research before you pay.
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Inherency: Every state has their own regulations or none at all which harms consumers.
Ciccolo, Joe. “Regulators Are Telling the Cryptocurrency Industry to Prioritize Consumer
Protection. Here's How.” BitAML, 2 Mar. 2020,
https://bitaml.com/2020/03/02/consumer-protection-in-cryptocurrency/.
But recent signals from state regulators point to a wider trend that cryptocurrency
business owners shouldn’t ignore, because they speak to how cryptocurrencies will be
regulated in the coming years. Currently, many state regulators maintain a “no action”
or “no opinion” stance on certain cryptocurrency businesses. This means that they do
not enforce specific regulations in their jurisdiction above and beyond what is
required at the federal level of all cryptocurrency businesses classified as money
services businesses/money transmitters.
Harms: Cryptocurrency scams and fraud is on the rise costing consumers millions.
Tayeb, Zahra. “Crypto Scams Are Preying on Vulnerable People. Many Victims Are
Deceived Online, Including an Elderly Woman Who Lost Thousands.” Business
Insider, Business Insider, 3 July 2021, https://www.businessinsider.com/bitcoinscam-robs-woman-cryptocurrency-fraud-cases-surge-2021-7.
Cryptocurrency scams are on the rise, with victims often being tricked out of
thousands of dollars. This is backed up by recent data from the FTC, which shows that
since October 2020, consumers have reported losing more than $80 million to
cryptocurrency scams. This represents an increase of more than ten-fold year-on-year.
In one such case, a 77-year-old woman lost more than $12,000 after being lured into a
bitcoin scam, Chicago Tribune reported. The incident occurred after the Indiana-based
woman received an email alert last month claiming to warn her of fraudulent activity on
her PayPal account.
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Solvency: The USFG has an obligation to protect consumers.
Federal Trade Commission. “Financial Privacy.” Federal Trade Commission, 23 Aug.
2019, https://www.ftc.gov/news-events/media-resources/protecting-consumerprivacy/financial-privacy.
Financial institutions are required to take steps to protect the privacy of consumers’
finances under a federal law called the Financial Modernization Act of 1999, also
known as the Gramm-Leach-Bliley Act. The FTC is one of the federal agencies that
enforces provisions of Gramm-Leach Bliley, and the law covers not only banks, but also
securities firms, and insurance companies, and companies providing many other types
of financial products and services. Under the law, agencies enforce the Financial
Privacy Rule, which governs how financial institutions can collect and disclose
customers’ personal financial information; the Safeguards Rule, which requires all
financial institutions to maintain safeguards to protect customer information; and
another provision designed to prevent individuals and companies from gaining access
to consumers’ personal financial information under false pretenses, a practice known
as "pretexting."
Impact: Regulation can protect consumers while also allowing the industry to grow.
Leotta, Michael. “Annual 2021: Time to regulate cryptocurrencies?-- or not”. American
Bar Association. 4 Aug 2021. https://www.americanbar.org/news/abanews/abanews-archives/2021/08/annual-2021--time-to-regulate-cryptocurrencies----ornot/
There are concerns that unregulated digital asset activity can enable fraud and market
abuse and can lead to losses for U.S. consumers. These are real dangers. Moreover,
many in the digital assets industry agree that there are gaps and ambiguities in the
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current regulatory regime that disadvantage U.S. companies compared to their foreign
competitors. If regulation is done well, it can not only protect consumers, but it can
also clarify these gaps and ambiguities in a way that will allow the U.S. digital assets
industry to innovate and mature.
Analysis: Current lack of regulations in cryptocurrency is harming consumers and the
cryptocurrency industry by default. Regulations that protect individuals from fraud, scams, and
millions of stolen dollars benefits everyone. Consumers will trust the business while also
keeping their money safe for reinvestment into the economy.
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PRO: Regulation can limit criminal use and harms
Significance: Unregulated Cryptocurrencies are shielding criminal activities.
Reuters. “Unregulated Spread of Cryptocurrencies a Concern, Says Italian Regulator.”
Reuters, Thomson Reuters, 14 June 2021,
https://www.reuters.com/business/unregulated-spread-cryptocurrencies-concernsays-italian-regulator-2021-0614/#:~:text=Savona%20said%20there%20were%20some,is%20worrying%2C%22%2
0Savona%20said.
Savona said there were some 4,000-5,000 cryptocurrencies in circulation without any
form of real regulation. "If we add to this Consob's recent own experience in closing
down in Italy hundreds of websites illegally gathering savings, the picture that emerges
is worrying," Savona said. He warned that the currencies could be a shield for criminal
activity such as tax evasion, money laundering, funding terrorism and kidnapping.
Inherency: Cryptocurrency offers criminals anonymity
Hung Tran. “Regulation: The Solution to Bitcoin's Risks and Unrealized Benefits.” Atlantic
Council, 1 July 2021, https://www.atlanticcouncil.org/blogs/newatlanticist/regulation-the-solution-to-bitcoins-risks-and-unrealized-benefits/.
For bad actors, however, Bitcoin offers a dark medium to engage in illegal
activities including money laundering, financing terrorism, collecting ransoms in hacks
or cyberattacks, and buying or selling banned substances or other objects. Though
transactions leave a digital footprint that can be traced, especially through exchanges
and other services converting Bitcoin to central bank-issued currencies and vice versa, the
anonymity of Bitcoin makes tracing transactions more difficult.
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Harms: Criminals are exploiting this lack of regulation.
Consumer Financial Protection Bureau “Risks to Consumers Posed ...”. Consumer
Finance.gov August 2014.
https://files.consumerfinance.gov/f/201408_cfpb_consumer-advisory_virtualcurrencies.pdf.
Many criminals have seized upon the press and enthusiasm relating to virtual currency
to create new versions of old scams. In early 2014, the U.S. Securities and Exchange
Commission sued the organizer of an alleged Ponzi scheme in Texas that purportedly
advertised an “investment opportunity” that promised up to 7% interest per week.
Instead, invested Bitcoins were allegedly used to pay existing investors and the
organizer’s personal expenses. Like any other investment, do your due diligence before
giving someone money. The U.S. Securities and Exchange Commission has issued
important warnings about virtual currency investment scams, which you can read at
www. sec.gov/investor/alerts/ia_virtualcurrencies.pdf and www.sec.gov/oiea/investoralerts-bulletins/ investoralertsia_bitcoin.html.
Warrant: Criminal cryptocurrency use helps to anonomize and launder the funds.
van Wegberg, R., Oerlemans, J.-J. and van Deventer, O. (2018), "Bitcoin money
laundering: mixed results? An explorative study on money laundering of
cybercrime proceeds using bitcoin", Journal of Financial Crime, Vol. 25 No. 2, pp.
419-435. https://doi.org/10.1108/JFC-11-2016-0067
In both types of cybercrime, bitcoin can be seen as an enabler of the digital criminal
enterprise. The main instigators of their popularity among cybercriminals is that they
are straightforward to use, relatively anonymous, and their use is unimpeded by
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borders or legislation (Shcherbak, 2013; Bryans, 2014). Steadily, bitcoin has proven itself
to be a vital part of the criminal enterprises. For instance, ransomware victims are
pressed to exchange the ransom from fiat currency to bitcoin and transfer this amount
to a specific bitcoin address that is provided by the criminals. On underground markets,
large amounts of goods and services – like drugs, weapons and DDoS-attacks – are
bought and sold using bitcoin as method of payment. In online underground markets,
bitcoins are therefore to be seen as the preferred currency of criminals (Motoyama et
al., 2011; Sood et al., 2013; Moore and Rid, 2016). And recently, criminals start to
embrace bitcoin as a partner in their cash-out strategy and launder money aided by
bitcoin (Möser et al., 2013).
Solvency Impact: Regulation help reduce, but not where regulations are weak.
Kessering, Leslie. “Ninety-Seven Percent (97%) of Criminal Bitcoin Flows into Unregulated
Cryptocurrency Exchanges According to New Research.” Ninety-Seven Percent
(97%) of Criminal Bitcoin Flows into Unregulated Cryptocurrency Exchanges
According to New Research | Business Wire, 10 Oct. 2018,
https://www.businesswire.com/news/home/20181010005694/en/Ninety-SevenPercent-97-of-Criminal-Bitcoin-Flows-into-Unregulated-CryptocurrencyExchanges-According-to-New-Research.
Efforts to enact and enforce strong cryptocurrency Anti-Money Laundering (AML)
regulations are drastically reducing criminal activity on digital currency exchanges,
according to new research released today in the CipherTrace 2018 Q3 Cryptocurrency
Anti-Money Laundering Report. The study revealed that 97 percent of direct bitcoin
payments from criminals went to exchanges in countries with weak anti-money
laundering laws.
Impact: Regulation of cryptocurrency can help fight terrorism and other crimes.
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Malik, Nikita. “How Criminals and Terrorists Use Cryptocurrency: And How to Stop It.”
Forbes, Forbes Magazine, 31 Aug. 2018,
https://www.forbes.com/sites/nikitamalik/2018/08/31/how-criminals-andterrorists-use-cryptocurrency-and-how-to-stop-it/?sh=14bae18b3990.
The second option is better regulation. In 2017, the United States government proposed
that the Department of Homeland Security study the link between bitcoin and
terrorism, because the anonymity offered by digital currencies provides terrorists with
the privacy they seek. Her Majesty's Treasury in the United Kingdom has also sought to
increase regulation by requiring digital currency exchange users to disclose their
identities. Further measures are being taken to bring digital currencies in line with
existing Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) legislation.
By combining the two, we can disrupt financial flows to criminal and terrorist groups
online.
Analysis: Criminals and terrorists are exploiting the lack of cryptocurrency regulations allowing
them to continue their criminal enterprises which harm individuals and society. Regulations are
one way in which governments can trace and stop criminal and terrorist activities, or bring
them justice after. Regulations would go a long way to help keep cryptocurrency from being the
criminal underground’s method of harming others.
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PRO: Regulation of cryptocurrency will help legitimize it for
greater use.
Significance: Cryptocurrency is extremely volatile and needs intervention.
Sigalos, MacKenzie. “Bitcoin's Wild Price Moves Stem from Its Design - You'll Need Strong
Nerves to Trade It.” CNBC, CNBC, 20 May 2021,
https://www.cnbc.com/2021/05/19/why-is-bitcoin-so-volatile.html.
But volatility is also the price that bitcoin investors pay for its limited supply and its lack
of a central bank to control that supply — precisely the features proponents say give it
value.
Part of what makes bitcoin valuable is the fact that it is scarce. There are 18.7
million bitcoin in circulation, which is nearing its maximum threshold of 21 million.
“Bitcoin has clearly established itself as a new form of value, but the terminal value is
still undefined,” continued Bucella. “That information gap lends itself towards a
momentum, or technically driven market, absent new information.” The path to true
price discovery is often fraught with seismic price swings, but Bhutoria points out that
the alternative is artificial stability, which can result in distorted markets that may
break down without intervention.
Inherency: The IMF says greater regulation of cryptocurrency needed.
Elliot, Larry. “IMF warns of global risks from unregulated cryptocurrency boom”. The
Guardian. 1 Oct. 2021.
https://www.theguardian.com/business/2021/oct/01/imf-warns-of-global-risksfrom-unregulated-cryptocurrency-boom
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Tougher regulation is needed to prevent the rapid growth in cryptocurrencies leading
to financial instability, defrauding of consumers and the funding of terrorism, the
International Monetary Fund has said. The Washington-based IMF said the 10-fold
increase in the market value of crypto assets – digital or virtual currencies – to more
than $2tn since early 2020 required more active and collaborative supervision by
governments.
Harms: Unregulated criminal use of crypto keeps it from gaining legitimacy..
Gebbing, Henrik, and Wilhelm Nöffke. “Regulating Crypto Is Essential to Ensuring Its
Global Legitimacy.” TechCrunch, TechCrunch, 16 Aug. 2021,
https://techcrunch.com/2021/08/16/regulating-crypto-is-essential-to-ensuringits-global-legitimacy/.
The past decade has seen several structural changes in know your customer (KYC) and
anti-money laundering (AML) regulations in Europe and globally. High-profile money
laundering cases and the penetration of illicit funds into global markets have caught
the attention of regulators and the public, and rightfully so. The Wirecard scandal was a
particularly salacious example, in which the investigation into widespread
fraud revealed a chain of shell companies involved in illegal distribution of narcotics and
pornography. Over at Danske Bank, some $227 billion was laundered through an
Estonian subsidiary, going virtually unnoticed for nine years. In the United States, the
Securities and Exchange Commission filed an action against Ripple Labs and two of its
executives, claiming they had raised over $1.3 billion through an unregistered,
ongoing digital asset securities offering. That case is ongoing.
Impact: Announcements of minor regulations stabilized trading.
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Franck, Tom. “U.S. Treasury Calls for Stricter Cryptocurrency Compliance with IRS, Says
They Pose Tax Evasion Risk.” CNBC, CNBC, 20 May 2021,
https://www.cnbc.com/2021/05/20/us-treasury-calls-for-strictercryptocurrency-compliance-with-irs.html.
“Cryptocurrency already poses a significant detection problem by facilitating illegal
activity broadly including tax evasion,” the Treasury Department said in a release.
“This is why the President’s proposal includes additional resources for the IRS to
address the growth of cryptoassets,” the department added. “Within the context of the
new financial account reporting regime, cryptocurrencies and cryptoasset exchange
accounts and payment service accounts that accept cryptocurrencies would be covered.
Further, as with cash transactions, businesses that receive cryptoassets with a fair
market value of more than $10,000 would also be reported on.” Bitcoin reversed course
shortly after the Treasury’s announcement and was last seen trading up
1.6%, according to Coin Metrics. Previously in the session, it was up more than 9%.
Impact: Cryptocurrency would benefit from legimization.
Alcorn, Thomas, et all. “Legitimizing Bitcoin: Policy Recommendations “- MIT CSAIL.
2013. https://groups.csail.mit.edu/mac/classes/6.805/student-papers/fall13papers/bitcoin.pdf.
Bitcoin represents an innovation in currency technology, with the potential to bring
economic benefits to whoever can utilize it the best. However, like any new
technology it suffers from uncertainty and a lack of public understanding and trust, a
problem that is exacerbated by the slow rate of innovation in methods of storing and
transacting money. Nonetheless, users, merchants and governments around the world
are competing to develop the infrastructure needed to facilitate and support large,
userfriendly economies in Bitcoin. Therefore, the time is ripe for U.S. lawmakers to
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recognize Bitcoin as a legitimate means of transacting business, and as an opportunity
for bringing competition, efficiency and new growth to several industries, including
banks, credit card companies and money transmitters and exchangers. After analyzing
the state of Bitcoin, the benefits it may bring and the potential problems that might
arise, we present three major policy recommendations for the federal government: (1)
Legitimize Bitcoin by defining it in the law and recognizing Bitcoin stakeholders (2)
Regulate Bitcoin marketplaces and businesses to protect public and government
interests while enabling innovation. (3) Maintain a Bitcoin reserve to help stabilize the
currency. We believe these policies will benefit Bitcoin users, many of whom are
ordinary lawabiding Americans, and help to promote the development of Bitcoin
“innovation clusters” in the United States, similar to the innovation cluster in Silicon
Valley that formed during the early days of the Internet.
Impact: Legitimization would increase business confidence in crypto.
Smith, Sean Stein. “Crypto Regulation Needs Clarity, but Rushing It Is a Bad Idea.”
Forbes, Forbes Magazine, 3 Aug. 2021,
https://www.forbes.com/sites/seansteinsmith/2021/08/03/crypto-regulationneeds-clarity-but-rushing-it-is-a-bad-idea/?sh=24923ed67629.
No matter what sector is being analyzed, an underlying truth of business is that
business dreads uncertainty, and that is exactly what the blockchain and crypto
sectors have been operating with since inception. Despite this uncertainty, however,
the ecosystem has continuously developed and grown in an array of new directions,
but resolving some of the tax and reporting ambiguity around crypto would go a long
way to increasing business confidence.
Impact: Legitimization of crypto will benefit global transactions and economy
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Mearian, Lucas. “The Race to Integrate Crypto into Global Banking Is Real.”
Computerworld, Computerworld, 10 Jan. 2020,
https://www.computerworld.com/article/3512650/the-race-to-integrate-cryptointo-global-banking-is-real.html.
Among other banking entities, the International Monetary Fund (IMF) has shown
support for fiat-backed cryptocurrencies, saying they can reduce the reliance on
government-issued money, "and unlike bank transfers, crypto asset transactions can
be cleared and settled quickly without an intermediary,” Dong He, deputy director of
the IMF’s Monetary and Capital Markets Department, wrote in a post for the IMF. “The
advantages are especially apparent in cross-border payments, which are costly,
cumbersome, and opaque," He said. "New services using distributed ledger
technology and crypto assets have slashed the time it takes for cross-border payments
to reach their destination from days to seconds by bypassing correspondent banking
networks.” In a blog post, the IMF said today’s fiat currencies are in flux “and
innovation will transform the landscape of banking and money.” Other countries are
already looking to innovate in ways that given them an advantage.
Analysis: In order for cryptocurrency’s full potential to be realized, it must become a legitimate
asset that can be relied upon. Regulation will stabilize the monetary system allowing it to
become a global system to increase business confidence. benefit millions, and increase
innovation.
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PRO: Regulation of Cryptocurrency will benefit
cryptocurrency
Significance: Unregulated cryptocurrency undermines its own value.
Karacheva, Elena. “Advantages and Disadvantages of Cryptocurrency.” CCM. 4 Mar
20201. https://ccm.net/faq/75869-advantages-and-disadvantages-ofcryptocurrency.
Cryptocurrency combines strong encryption and anonymity and decentralization. This
makes it very hard for the government to track down users, and even if this can be great
for the regular person, this occasion could be used for money laundering and by
criminals. One of the biggest cons is that there is no refund policy for cryptocurrencies:
if you mistakenly pay someone, there is nothing to guarantee your money back. Since
the Bitcoin era and because of the many stories of getting rich thanks to Bitcoin,
cryptocurrencies have gained much attention and have, unfortunately, attracted many
scammers. The lack of refund policy makes it easier to fraud people. Cryptocurrency is
the product of computer science - this can make the vocabulary very hard to
understand, as well as how it functions, without dedicating an important amount of
time. Also, even though more and more people become familiar with the idea of
cryptocurrency, its use is still limited and regulation policies vary from country to
country.
Inherency: Cryptocurrency needs to be regulated to stabilize their value.
Little, Kendall. “Fed Chairman: U.S. Might Need More Crypto Regulation. Here's What
That Means for Investors | Nextadvisor with Time.” Time, Time, 12 Aug. 2021,
https://time.com/nextadvisor/investing/cryptocurrency/more-federal-regulationcoming-for-crypto/.
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Stablecoins (Tether and USD Coin, for example) are a category of cryptocurrencies that
peg their value to an existing fiat currency, like the U.S. dollar. That helps stabilize
their value, so they’re better suited for digital payments — unlike more volatile digital
assets like Bitcoin. Ideally, these coins are underwritten by a reserve of the currency
they’re tied to, but today there’s little official regulation enforcing that. Powell
compared them to money market funds or bank deposits, which have a strong
regulatory framework in the United States. “That doesn’t exist for stablecoins,” he
said. “And if they’re going to be a significant part of the payments universe — which
we don’t think crypto assets will be, but stablecoins might be — then we need an
appropriate regulatory framework, which frankly we don’t have.”
Harms: Current lack of regulation is a risk keeping investors away.
Szalay, Eva. “Bitcoin: Too Good to Miss or a Bubble Ready to Burst?” Financial Times, 30
Apr. 2021, https://www.ft.com/content/be796d33-a5e7-4753-98a8b586f1680d58.
So is bitcoin just a big Ponzi scheme or a genuine investment opportunity? Should retail
investors give in to the temptation to pile in? FT Money has spoken to finance
professionals inside and outside the cryptomarket and found that opinion remains
sharply divided. The recent stellar performance has turned some bears into bulls. But
hardcore naysayers warn that a bubble that has grown bigger is still a bubble. Even
ardent crypto fans are reluctant to wager their life savings on an asset associated with
hair-raising levels of volatility. Even among these enthusiasts, many limit their
investments to 1-2 per cent of their portfolio. Regardless of whether cryptocurrencies
turn out to be the digital equivalent of gold in the long run, today they are providing
fraudsters with a rich hunting ground.
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Solvency: Regulations will help fix the gap and protect investors and increase its legitimacy.
Massad, Timothy. “It's Time to Strengthen the Regulation of Crypto-Assets.” Harvard
Kennedy School, 2019.
https://www.hks.harvard.edu/centers/mrcbg/publications/awp/awp112.
There is a gap in the regulation of crypto-assets that Congress needs to fix. The gap is
contributing to fraud and weak investor protection in the distribution and trading of
crypto-assets. Better regulation will benefit crypto investors, further the development
of new technologies, curtail the use of crypto-assets used for illicit payments, and
reduce the risk of cyber attacks, which can result in collateral damage elsewhere in
our financial system. Crypto-assets cut across current jurisdictional boundaries and thus
fall into gaps between regulatory authorities. While each of the Securities and Exchange
Commission (SEC) and the Commodity Futures Trading Commission (CFTC) has some
authority over crypto-assets, neither has sufficient jurisdiction, nor do they together.
Impact: Regulations of cryptocurrency would bring the benefit of certainty and confidence.
Cowan, David. “Cryptocurrency Regulation Is Becoming a Top Priority.” Raconteur, 18
Feb. 2020, https://www.raconteur.net/finance/cryptocurrency/cryptocurrencyregulation-top-priority/.
Market participants are campaigning for cryptocurrency regulation because it brings
the much-needed benefit of certainty. Mr Salmon explains: “The priority is dealing
with the uncertainty and to achieve this the industry needs a consistent taxonomy to
deal with the problem of different terms being used.” Mr Zagone agrees: “Regulatory
certainty is needed and greater co-ordination. Self-regulation works where you have a
mature industry and strong governance. This technology is at an early stage, so it is
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too early to be an option, but could be in the future.” With legal certainty comes the
benefit of confidence. Matt Bisanz, financial services regulatory and enforcement
associate at Mayer Brown in Washington, says: “Safeguards and protections will inspire
confidence. We’ve seen this with other technology developments, like online grocery
delivery. When it was first launched there were doubts, but it happened in
incremental steps and we are now comfortable with it. There was trial and error. The
same will happen here.”
Analysis: The current instability of cryptocurrency keeps investors and use of the
cryptocurrency from reaching its full potential. Regulation of the cryptocurrency market will
inspire confidence and consistency which will benefit the cryptocurrency market in ensuring its
stability for use. Investors will feel protected and insured against crime, volatile possible
bubbles, and will benefit the industry overall.
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PRO: Regulation of cryptocurrency benefits businesses
Significance: Businesses already have to count cryptocurrency as income to the IRS.
Hyatt, John. “Decoding Crypto: Are There Regulations in the U.S. for Cryptocurrency?”
Nasdaq. 19 Aug 2021. https://www.nasdaq.com/articles/decoding-crypto%3A-arethere-regulations-in-the-u.s.-for-cryptocurrency-2021-08-19.
In the last few years, U.S. federal regulatory agencies have issued a range of policies
concerning their treatment of cryptocurrency transactions, investment gains, payment
services, and activity other involving digital assets. The U.S. Securities and Exchange
Commission (SEC) has said it views cryptocurrencies as securities, and will apply existing
securities laws to digital assts. This is important for retail investors, because it means
they are obligated to report realized gains and losses from crypto investments on their
annual tax forms. Failure to do so will invite the scrutiny of the Internal Revenue Service,
which has vowed to crack down on crypto tax dodgers.
Warrant: Individual state regulations vary widely for crypto currency.
Tran, Hung. “Regulation: The Solution to Bitcoin's Risks and Unrealized Benefits.” Atlantic
Council, 1 July 2021, https://www.atlanticcouncil.org/blogs/newatlanticist/regulation-the-solution-to-bitcoins-risks-and-unrealized-benefits/.
US states and municipalities take different regulatory approaches. These range from
being friendly to cryptocurrency businesses by issuing, for instance, a new state banking
charter, called a special purpose depository institution, for banks that deal mostly in
digital assets (Wyoming); to banning cryptocurrency mining; to requiring the
registration of exchanges and other companies servicing Bitcoin transactions as moneyservices companies or money transmitters. New York, Rhode Island, and Arizona have
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developed reputations as less friendly to cryptocurrency activities because of their
attempts to regulate those businesses, while several states have created regulatory
sandboxes that exempt cryptography businesses from regulatory oversight for the
initial development period.
Inherency: The Value of cryptocurrency is unstable and unsecured.
Thackery, John. “5 Inherent Risks of Cryptocurrency.” FEI Daily,. 17 July 2018.
https://daily.financialexecutives.org/FEI-Daily/July-2018/5-Inherent-Risks-ofCryptocurrency.aspx.
Loss of confidence in digital currencies: the nascent nature of the currencies is subject
to a high degree of uncertainty. Online platforms have generated a large trading activity
by speculators seeking to profit from the short-term or long-term holding of digital
currencies. Cryptocurrencies are not backed by a central bank, a national or
international organization, or assets or other credit, and their value is strictly
determined by the value that market participants place on them through their
transactions, which means that loss of confidence may bring about a collapse of
trading activities and an abrupt drop in value.
Harms: Businesses and their consumers are not guaranteed protection in case of loss.
Tidy, Joe. “The Real Victims of Mass Crypto-Hacks That Keep Happening.” BBC News,
BBC, 25 Aug. 2021, https://www.bbc.com/news/technology-58331959.
BitGrail: $146m was hacked from the Italian exchange in 2018. It's estimated that
230,000 BitGrail users lost funds. KuCoin: $281m was stolen by suspected North Korean
hackers from this attack on the Seychelles-based exchange in 2020. The company
recovered most of the funds and refunded customers. MtGox: $450m of mainly Bitcoin
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was hacked in 2014 which collapsed the Japanese exchange. None of the customers
have been reimbursed yet.
Coincheck: $534m was stolen in 2018 from the Japanese exchange. Customers were
eventually reimbursed. Poly Network: $610m was hacked from the Chinese platform
earlier this month in various coins. The hacker returned all the funds and customers
have started being reimbursed.
Incidents involving tens of millions, or even hundreds of millions, of dollars are
happening almost every few months and, because these platforms are largely
unregulated, there's no guarantee that customers get their money back.
Solvency Impact: Regulation of crypto would increase investment and innovation.
Falkon, Samuel. “How Cryptocurrencies Could Benefit from Greater Regulation.” Medium,
The Startup, 19 Feb. 2018, https://medium.com/swlh/how-cryptocurrencies-couldbenefit-from-greater-regulation-c64b70bfd192.
If regulation bolsters investor demand, it could provide a boon to innovation by
ensuring that the actors helping drive this change have the funding they need. As long
as investor inflows remain strong, it will help varying funding methods — including
initial coin offerings and venture capital rounds — that provide support for innovation.
With healthy funding, developers and technologists will have the freedom to pursue
multiple projects.
Impact: Regulations will help manage risk management of cryptocurrency.
Massad, Timothy. “It’s time to strengthen the regulation of cryptocurrency”. 18 Mar
2019. https://www.brookings.edu/wp-content/uploads/2019/03/Timothy-MassadIts-Time-to-Strengthen-the-Regulation-of-Crypto-Assets-2.pdf.
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I have argued that there is a significant gap in the regulation of crypto-assets—in
particular in the distribution and trading of cryptocurrencies—that needs to be fixed.
Although the promise of Bitcoin was to reduce our reliance on large intermediaries, it has
instead given rise to the creation of new financial intermediaries that are subject to
inadequate oversight. These institutions are not required to follow traditional standards
of customer protection and market integrity. This has led to a situation where allegations
of manipulation and fraud are common and customer protection is weak. Better
regulation would serve broader societal interests as well. These institutions have been
the targets of frequent cyber hacks, and successful attacks can cause unpredictable
collateral damage. The use of crypto-assets for illicit payments is another concern.
Better regulation would bring greater transparency and risk management which could
help address both problems.
Analysis: The unregulated cryptocurrency market is currently unstable, unreliable and
problematic for businesses. It is counted as an asset for taxes, but the value of that tax and
asset for payment is unsure. While it is a growing investment and payment option, the
regulation from the Federal Government is necessary in order to stableize and protect
businesses so that they will more widely use and invest in the growth of digital payment
systems world wide.
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PRO: US gov should increase regulations on cryptocurrency
assets and/or transactions through firm taxation policy
Argument: The IRS needs to crack down on cryptocurrency
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“The IRS has issued guidance stating that virtual currencies are treated as property (as
opposed to currency) for tax purposes, meaning users owe taxes on any realized gains
whenever they dispose of virtual currency, including when they use it to purchase
goods and services.82 However, there is a lack of clarity surrounding whether and to
what degree people are appropriately declaring gains from cryptocurrency on their tax
returns. By November 2016, the IRS had come to believe that cryptocurrency gains were
being underreported, finding that between 2013 and 2015 only 800 to 900 tax returns
declared such gains. 83 At the time, cryptocurrency exchanges were generally not
reporting transaction information to the IRS, so the IRS initiated court proceedings
against Coinbase—the largest cryptocurrency exchange operating in the United States—
seeking to compel it to turn over customer information so that the IRS could determine
the amounts taxpayers owed. 84 Coinbase resisted turning over the information until
the court eventually ruled against it in November 2017.85 Coinbase notified 13,000
customers that it was turning over information in their accounts to comply with the
order. In July 2019, the IRS sent letters to 10,000 taxpayers with cryptocurrency
transactions alerting them that they potentially had not met their reporting
requirements (although the IRS did not explicitly link the letters to the Coinbase case).
The prevalence of using cryptocurrency to avoid taxes is uncertain at this time. The
language in certain variations of the letters the IRS sent indicates the IRS did not think
these recipients’ failure to pay was intentional.87 Even in cases where the failure might
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have been willful, it is not clear if money laundering was the primary motivation. Rather,
investors may have been seeking to profit from cryptocurrency, and then not paying
taxes on the gains after the fact, rather than primarily seeking to hide assets from tax
authorities. Indeed, cryptocurrencies’ poor performance as a store of value may make
them a poor instrument for this purpose at this time. In addition, prominent U.S.
cryptocurrency exchanges now generally submit customer and transaction data on
certain customers to the IRS. Nevertheless, the difficulty the IRS experienced with the
largest and most well-known cryptocurrency exchange may suggest that individuals
who seek to evade taxes might look to cryptocurrency as a possible avenue.”
Warrant: IRS intervention in regulating crypto assets has been successful historically
Saunders, Laura. “The IRS Is Coming for Crypto Investors Who Haven't Paid Their
Taxes.” The Wall Street Journal, Dow Jones & Company, 14 May 2021,
https://www.wsj.com/articles/bitcoin-irs-comes-for-crypto-investors-whohavent-paid-their-taxes-11620937095.
“The new summonses aren’t the first of their kind. In 2016, the IRS received approval for
a similar summons of the crypto firm Coinbase Global and obtained information for
about 13,000 customers. The agency sent letters urging many of them to make sure
their crypto taxes were paid, as the IRS might soon take a hard look. To justify the new
searches of Kraken and Circle, the IRS divulged some results of the Coinbase campaign.
In court filings, the agency said it has received more than 1,000 amended tax returns
and collected $13 million from crypto holders with more than $20,000 of transactions,
plus another $12 million from other crypto notices, and audits are ongoing.”
Warrant: Investors avoid capital gains taxes on cryptocurrency by selling more recent
investments (lot identification)
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Saunders, Laura. “The IRS Is Coming for Crypto Investors Who Haven't Paid Their
Taxes.” The Wall Street Journal, Dow Jones & Company, 14 May 2021,
https://www.wsj.com/articles/bitcoin-irs-comes-for-crypto-investors-whohavent-paid-their-taxes-11620937095.
“Investors who are selling some but not all of a crypto holding bought at different
prices can often minimize taxes, sometimes a great deal, by specifying which lot they
are selling. For example, say that someone sold bitcoins at $22,000 each in December
2020 and had coins bought in 2016 for $600 and 2017 for $16,000. Selling the 2016
coins would mean a taxable gain of $21,400 each, while selling the 2017 coins would
mean a gain of $6,000 each—a big difference. Keeping good records of crypto lots can
be hard because platforms may not be set up for this, says Jordan Bass, a CPA and tax
attorney with Taxing Cryptocurrency. He often recommends transferring crypto not
slated for sale to “cold wallets” and then moving it to “hot wallets” shortly before a sale,
to clarify what’s being sold.”
Warrant: Investors offset capital gains by taking advantage of the wash sale rule
Saunders, Laura. “The IRS Is Coming for Crypto Investors Who Haven't Paid Their
Taxes.” The Wall Street Journal, Dow Jones & Company, 14 May 2021,
https://www.wsj.com/articles/bitcoin-irs-comes-for-crypto-investors-whohavent-paid-their-taxes-11620937095.
“Because cryptocurrencies aren’t technically securities, they aren’t subject to the socalled wash-sale rules. These rules reduce the benefit of capital losses if an investor
purchases the security 30 days before or after selling it at a loss. Mr. Bass often advises
clients to harvest capital losses on crypto to offset current or future capital gains. If the
investor still is bullish on the holding, she can repurchase it right away.”
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Impact: Tax revenue helps to pay for essential government services
“Policy Basics: Where Do Our Federal Tax Dollars Go?” Center on Budget and Policy
Priorities, 9 Apr. 2020, https://www.cbpp.org/research/federal-budget/wheredo-our-federal-tax-dollars-go.
“In fiscal year 2019, the federal government spent $4.4 trillion, amounting to 21
percent of the nation’s gross domestic product (GDP). Of that $4.4 trillion, over $3.5
trillion was financed by federal revenues. The remaining amount ($984 billion) was
financed by borrowing. As the chart below shows, three major areas of spending make
up the majority of the budget: Social Security: In 2019, 23 percent of the budget, or $1
trillion, paid for Social Security, which provided monthly retirement benefits averaging
$1,503 to 45 million retired workers in December 2019. Social Security also provided
benefits to 3 million spouses and children of retired workers, 6 million surviving children
and spouses of deceased workers, and 10 million disabled workers and their eligible
dependents in December 2019. Medicare, Medicaid, CHIP, and marketplace subsidies:
Four health insurance programs — Medicare, Medicaid, the Children’s Health Insurance
Program (CHIP), and Affordable Care Act (ACA) marketplace subsidies — together
accounted for 25 percent of the budget in 2019, or $1.1 trillion. Nearly three-fifths of
this amount, or $651 billion, went to Medicare, which provides health coverage to
around 61 million people who are over age 65 or have disabilities. The rest of this
category funds Medicaid, CHIP, and ACA subsidy and marketplace costs. In a typical
month, Medicaid and CHIP provide health care or long-term care to about 82 million
low-income children, parents, elderly people, and people with disabilities. (Both
Medicaid and CHIP require matching payments from the states.) In 2019, 9.6 million of
the 11.4 million people enrolled in health insurance through the ACA marketplace
received subsidies that lower premiums and out-of-pocket costs, at an estimated cost of
about $56 billion. Defense and international security assistance: Another 16 percent of
the budget, or $697 billion, paid for defense and security-related international activities.
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The bulk of the spending in this category reflects the underlying costs of the Defense
Department. The total also includes the cost of supporting operations in Afghanistan
and other related activities, described as Overseas Contingency Operations in the
budget, funding for which totaled $77 billion in 2019.”
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PRO: US gov should increase regulations on cryptocurrency
assets and/or transactions sent abroad
Argument: Cryptocurrencies can be created by governments as a means of avoiding US
sanctions
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“Although it is outside the scope of this report, another potential reason a person or
entity may want to move money or assets while avoiding engagement with traditional
financial institutions could be to evade financial sanctions. For example, the
Venezuelan government has launched a digital currency with the stated intention of
using it to evade U.S. sanctions. The governments of Iran and Russia have expressed
interest in doing so, as well.”
Warrant: Cryptocurrencies can be used as a means to fund illicit activity
Siripurapu, Anshu. “Cryptocurrencies, Digital Dollars, and the Future of Money.” Council
on Foreign Relations, Council on Foreign Relations, 24 Sept. 2021,
https://www.cfr.org/backgrounder/cryptocurrencies-digital-dollars-and-futuremoney.
“Illicit activities. In recent years, cybercriminals have increasingly carried out
ransomware attacks, by which they infiltrate and shut down computer networks and
then demand payment to restore them, often in cryptocurrency. Drug cartels and
money launderers are also “increasingly incorporating virtual currency” into their
activities, according to the U.S. Drug Enforcement Agency’s (DEA) most recent annual
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assessment. U.S. and European authorities have shut down a number of so-called
darknet markets—websites where anonymous individuals can use cryptocurrency to
buy and sell illegal goods and services, primarily narcotics. Terrorism and sanctions
evasion. The primacy of the U.S. dollar has provided the United States unrivaled power
to impose crippling economic sanctions. However, sanctioned states including Iran and
North Korea are increasingly using cryptocurrency to evade U.S. penalties. Meanwhile,
terrorist groups such as the self-proclaimed Islamic State, al-Qaeda, and the military
wing of the Palestinian organization Hamas also traffic in crypto”
Warrant: US Regulation helps with tracking cryptocurrency
Siripurapu, Anshu. “Cryptocurrencies, Digital Dollars, and the Future of Money.” Council
on Foreign Relations, Council on Foreign Relations, 24 Sept. 2021,
https://www.cfr.org/backgrounder/cryptocurrencies-digital-dollars-and-futuremoney.
“To limit illicit activities, authorities have targeted the exchanges that allow users to
convert cryptocurrencies to U.S. dollars and other national currencies. Under pressure
from regulators, major exchanges including Coinbase, Binance, and Gemini adhere to
“know your customer” and other anti–money laundering requirements. Law
enforcement and intelligence agencies, meanwhile, have learned to leverage the
traceability of most cryptocurrencies by using blockchains to analyze and track
criminal activity. For example, some of the ransom paid to the Colonial Pipeline hackers
was later recovered by the FBI. In September 2021, the Treasury Department
announced a crackdown on the use of cryptocurrencies in ransomware attacks, issuing
its first sanctions on a crypto exchange.”
Warrant: Increased or continued regulation of crypto is necessary because of the quick and
anonymous nature of transactions
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Siripurapu, Anshu. “Cryptocurrencies, Digital Dollars, and the Future of Money.” Council
on Foreign Relations, Council on Foreign Relations, 24 Sept. 2021,
https://www.cfr.org/backgrounder/cryptocurrencies-digital-dollars-and-futuremoney.
“Once dismissed as a fringe interest of tech evangelists, cryptocurrencies—particularly
Bitcoin—have skyrocketed in value in recent years. In 2021, the price of a Bitcoin surged
to more than $60,000 for the first time. Different currencies have different appeals, but
the popularity of cryptocurrencies largely stems from their decentralized nature: They
can be transferred relatively quickly and anonymously, even across borders, without
the need for a bank that could block the transaction or charge a fee. Dissidents in
authoritarian countries have raised funds in Bitcoin to circumvent state controls, for
example. Some experts say that digital assets are primarily tools for investment.”
Warrant: Cryptocurrency administrators and exchanges are not fully compliant on current
regulations in line with the Financial Crimes Enforcement Network, which devotes itself to
anti-money laundering
Massad, Timothy G. It's Time To Strengthen the Regulation of Cypto-Assets. Brookings
Institution, Mar. 2019, https://www.brookings.edu/wpcontent/uploads/2019/03/Timothy-Massad-Its-Time-to-Strengthen-theRegulation-of-Crypto-Assets-2.pdf.
“Guidance issued by the Financial Crimes Enforcement Network (FinCEN) in 2013 made
it clear that cryptocurrency “administrators” and “exchanges” must register as Money
Service Businesses and comply with reporting and record keeping requirements.41 But
the absence of a regulatory framework for the intermediaries that would require record
keeping, reporting and transparency makes the job of enforcing those regulations
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difficult. As of October 2018, out of the 100 top exchanges listed on Coinmarket.cap, 13
had reportedly registered with FINCEN. The director of FinCEN, Kenneth Blanco,
expressed his surprise at how many exchanges only began compliance activities because
they received notice of an examination. “Compliance does not begin because you may
get caught, or because you are about to be discovered,” Blanco declared. “That is not a
culture that protects our national security, our country, and our families. It is not a
culture we will tolerate. A recent report by the Office of the New York Attorney General
found that the stated procedures of platforms related to onboarding of customers,
which is critical to complying with anti-money laundering (AML) and Know Your
Customer (KYC) regulations, varied widely, with some being very weak. Moreover, the
report simply surveys what the platforms claim to do; it did not investigate what they
actually do. Actual AML and KYC compliance may be even weaker.”
Warrant: US Regulation would make illicit activity far less likely
Massad, Timothy G. It's Time To Strengthen the Regulation of Cypto-Assets. Brookings
Institution, Mar. 2019, https://www.brookings.edu/wpcontent/uploads/2019/03/Timothy-Massad-Its-Time-to-Strengthen-theRegulation-of-Crypto-Assets-2.pdf.
“As noted earlier, a recent Chainalysis report found that organized criminal groups were
behind many of the recent exchange hacks and that such groups typically made
thousands of transfers of stolen funds to avoid detection.47 The report notes that
despite aggressive action by law enforcement agencies, darknet markets—used to
transfer and disguise the origin of stolen funds—have a “surprising resilience. The report
concludes that “crypto crime is evolving to become part of traditional crime, and we
think that trend will continue.”48 In addition, because cryptocurrencies are increasingly
used to evade government financial sanctions, it predicts that “2019 will force a
reckoning with the role that cryptocurrencies play in evading sanctions if governments
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want to giv[e] ‘sanctions back their bite.’” If all trading platforms and wallets were
required to register and comply with basic federal transparency standards, it would be
much easier to prevent the use of crypto-assets for illicit payments.”
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PRO:US gov should increase regulations on cryptocurrency to
prevent hacking
Argument: Crypto-hacking has become common.
Massad, Timothy G. It's Time To Strengthen the Regulation of Cypto-Assets. Brookings
Institution, Mar. 2019
https://www.brookings.edu/wpcontent/uploads/2019/03/Timothy-Massad-ItsTime-to-Strengthen-the-Regulation-of-Crypto-Assets-2.pdf.
“Inadequate regulatory oversight creates broader societal risks with respect to cyber
security and illicit payments. Unlike banks and exchanges, crypto intermediaries do not
face any specific cyber security requirements, and cyber hacks are common: “Hacking
[against crypto institutions] is on the rise because it works.” Crypto institutions are small
compared to banking, securities and derivatives markets, but they do not operate in
isolation; they have many connections with the broader financial system. A cyber-attack
on a crypto institution could lead to collateral damage elsewhere.”
Warrant: Hacking and stealing of cryptocurrency could be done relatively easily and is
trending upwards
“The Chainalysis 2021 Crypto Crime Report.” Chainalysis, 16 Feb. 2021,
https://go.chainalysis.com/rs/503-FAP-074/images/Chainalysis-Crypto-Crime2021.pdf.
“In 2020, over $520 million worth of cryptocurrency was stolen from services and
individuals through hacks and non-technical attacks like social engineering or phishing
efforts. That represents an uptick from 2019 following a huge decline from the
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amount stolen in 2018, most of which could be attributed to the $534 million Coincheck
hack. More than half of the amount stolen in 2020 was from the hack of the exchange
KuCoin, which we can now publicly attribute to Lazarus Group, a notorious North Koreaaligned cybercriminal syndicate responsible for hacking numerous cryptocurrency
exchanges over the last few years. The hackers managed to take $275 million worth of
cryptocurrency from KuCoin, making it the biggest cryptocurrency theft of the year and
third-largest of all time, though KuCoin claims to have recovered most of the funds.
Later in this section, we’ll look more at this hack and share details on how Lazarus
Group’s money laundering strategy changed in 2020.”
Warrant: Open-source code, which cryptocurrencies use to promote ease of access and
transfer, can be easily compromised and highlights the necessity of regulation and law
enforcement
“The Chainalysis 2021 Crypto Crime Report.” Chainalysis, 16 Feb. 2021,
https://go.chainalysis.com/rs/503-FAP-074/images/Chainalysis-Crypto-Crime2021.pdf.
“These attacks on bZx worked because the platform’s code contained no failsafes to
account for large price jumps on other DeFi platforms, which may have caught the
cybercriminals pumping wrapped Bitcoin’s price on Uniswap. shows the issue has now
been fixed. But this underlines another reason DeFi platforms are vulnerable to attack:
their use of open-source code. DeFi platforms move users’ funds based solely on their
underlying code without human intervention, so users need to be able to audit that
code in order to trust the platform, making open source a necessity. However, that
means cybercriminals can also analyze the code for vulnerabilities and plot the perfect
attack, as it appears they did in the case of the bZx flash loan attacks. In fact, bZx was
hacked again later in the year to the tune of , all because a single misplaced line of code
allowed users to manipulate their own balances under certain circumstances, creating
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new tokens for themselves at will. These attacks go to show how important it is for
DeFi platforms to implement the latest and greatest security measures. One provider
to watch here is , a company that helps DeFi platforms protect against price
manipulation attacks with decentralized price oracles. Decentralized price oracles
aggregate pricing data from more sources and deliver it to the DeFi platform on-chain
through a network of independent nodes, thereby making it harder for price
manipulators to target a single weak spot. However, even with such advancements,
regulators and law enforcement should look for ways to ensure the extremely
promising DeFi space remains safe for investors.”
Impact: Hacking threatens the stability of our financial system
Massad, Timothy G. It's Time To Strengthen the Regulation of Cypto-Assets. Brookings
Institution, Mar. 2019, https://www.brookings.edu/wpcontent/uploads/2019/03/Timothy-Massad-Its-Time-to-Strengthen-theRegulation-of-Crypto-Assets-2.pdf.
“The risk of a cyber-attack on our core financial market infrastructure was my biggest
concern while chairing the CFTC. It could result in significant interruption of trading
and other services, loss of data and customer assets, and potentially threats to
financial stability. We took actions to require trading and clearing platforms to maintain
stronger cybersecurity protections. But it is a never-ending battle to keep defenses up
to date. The Office of Financial Research (OFR) concluded in its 2017 Financial Stability
Report that cryptocurrencies have increased the risk that cyber-attacks will take place.
That’s because perpetrators — be they criminals or rogue state actors — can move
and hold money pseudonymously and escape detection, and thereby succeed in
ransomware demands.29 The OFR Report lists cyber-attacks as the top threat to
financial stability, and notes that the risk is especially great in the financial sector
because it is so interconnected and heavily reliant on technology.”
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Impact: Experts believe that hacking by the Lazarus Group, one of the largest hackers of
crypto currency to date, is being used to finance North Korea’s nuclear program, presenting a
danger to international safety
“The Chainalysis 2021 Crypto Crime Report.” Chainalysis, 16 Feb. 2021,
https://go.chainalysis.com/rs/503-FAP-074/images/Chainalysis-Crypto-Crime2021.pdf.
“Lazarus Group is a cybercriminal syndicate working on behalf of the North Korean
government. Lazarus has been responsible for numerous cryptocurrency exchange
attacks, such as the 2019 UpBit hack, which netted them more than $49 million worth
of cryptocurrency. Overall, the group is believed to have stolen more than $1.75
billion worth of cryptocurrency in the time it’s been active. Experts believe proceeds
from Lazarus Group hacks go toward North Korea’s nuclear weapons program, so
combatting their activity is of utmost importance for international safety and stability.
That’s why in 2020, the U.S. government took actions such as sanctioning two Chinese
nationals who helped Lazarus Group launder funds stolen in multiple cryptocurrency
hacks, and filing forfeiture complaints against 280 cryptocurrency addresses associated
with Lazarus Group hacks.”
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PRO: US gov should increase regulations on cryptocurrency
to prevent negative environmental impacts
Argument: Cryptocurrencies are energy-intensive.
Siripurapu, Anshu. “Cryptocurrencies, Digital Dollars, and the Future of Money.” Council
on Foreign Relations, Council on Foreign Relations, 24 Sept. 2021,
https://www.cfr.org/backgrounder/cryptocurrencies-digital-dollars-and-futuremoney.
“Bitcoin mining is an enormously energy-intensive process: the network now
consumes more electricity than many countries. This has sparked fears about crypto’s
contributions to climate change. Cryptocurrency proponents say this problem can be
solved using renewable energy; El Salvador’s president has pledged to use volcanic
energy to mine Bitcoin, for example. Environmental concerns reportedly prompted
Ethereum’s move to a proof-of-stake model, which uses less energy.”
Warrant: Mining, the process that creates bitcoin (the first cryptocurrency), is heavily energy
intensive
Kolbert, Elizabeth. “Why Bitcoin Is Bad for the Environment.” The New Yorker, 22 Apr.
2021, https://www.newyorker.com/news/daily-comment/why-bitcoin-is-badfor-the-environment.
“Mining is the process by which bitcoin is both created and accounted for. Instead of
being cleared by, say, a bank, bitcoin transactions are recorded by a decentralized
network—a blockchain. Miners compete to register the latest “block” of transactions
by solving cryptographic puzzles. The first one to the solution is rewarded with freshly
minted bitcoin. Miners today receive 6.25 bitcoins per block, which, at current values,
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are worth more than three hundred thousand dollars. It’s unclear exactly who dreamt
up bitcoin, so no one knows what this person (or persons) was thinking when the mining
protocols were first established. But, as Ari Juels, a computer scientist at Cornell Tech,
recently explained to me, the arrangement seems to have been designed with equity in
mind. Anyone devoting a processor to the enterprise would have just as much stake in
the outcome as anyone else. As is so often the case, though, the ideal was soon
subverted. “What was quickly discovered is that specialized computing devices—socalled mining rigs—are much, much more effective at solving these puzzles,” Juels
said. “And, in addition, there are economies of scale in the operation of these mining
groups. So the process of mining, which was originally conducted by a loose
federation of presumably individual participants with ordinary computing devices, has
now become heavily consolidated.”
Warrant: Environmental advocacy organizations attest to the urgency for action to be taken
as more companies push towards beginning their own mining operations in the US
Kolbert, Elizabeth. “Why Bitcoin Is Bad for the Environment.” The New Yorker, 22 Apr.
2021, https://www.newyorker.com/news/daily-comment/why-bitcoin-is-badfor-the-environment.
“Whether this is, in fact, the case is debatable. What’s beyond debate—or should be, at
least—is that this is a matter that shouldn’t be left to a local planning board to decide.
There’s no way for New York, or the U.S. as a whole, to meet its emissions-reductions
goals if old generating stations, rather than being closed, are converted into bitcoinmining operations. Greenidge may become the first mining firm with a “wholly-owned
power plant,” but, unless the state or federal government steps in, it won’t be the
last: another cryptocurrency firm, Digihost International, has already applied to New
York State’s Public Service Commission for permission to purchase a natural-gasburning station near Buffalo. As representatives of Earthjustice and the Sierra Club
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recently put it, in a letter to officials of New York’s Department of Environmental
Conservation, “additional scrutiny . . . is essential to prevent the floodgates opening
for other retiring power plants.””
Warrant: The trend towards the “proof-of-stake” concept increases the concentration of
mining power, which threatens the entirety of cryptocurrencies (either there are massive
environmental harms or there is a centralized, worse version of cryptocurrencies)
Crapo, Mike. “Exploring the Cryptocurrency and Blockchain Ecosystem: United States
Committee on Banking, Housing, and Urban Affairs.” Hearings | United States
Committee on Banking, Housing, and Urban Affairs, 11 Oct. 2018,
https://www.banking.senate.gov/hearings/exploring-the-cryptocurrency-andblockchain-ecosystem.
”The environmental costs of the energy use of Bitcoin and other cryptocurrencies is so
vast that has been correctly and repeatedly compared to an environmental disaster.
No need to repeat how such energy mis-use and waste is massive—larger than the
energy use per year of a mid-sized advanced economy. Such an environmental disaster
has shamed even supporters of crypto who have become defensive given the
embarrassing evidence of such energy costs and pollution. But now zealot supporters of
crypto are pretending that this environmental disaster can be minimized or resolved
soon. Since using millions of computers to do useless cryptographic games to secure the
verification of crypto transactions is a useless waste of energy—as the same
transactions could be reported at near zero energy costs on an single Excel
spreadsheet—crypto zealots argue that such costs could be massively reduced if
crypto moves from energy-hogging PoW to less energy wasteful Proof of Stake. But as
we discussed above in detail, scalability of crypto transactions via PoS will be massively
concentrated in dangerous oligopolies—even more so than PoW—and therefore such
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centralization of mining power will lead to most severe problems of security. So, there
is no free lunch here. Either crypto keeps on using energy-hogging and environmentaldisaster PoW or it will become an insecure, centralized, and dangerous system.”
Impact: The environmental impacts of Bitcoin mining are tremendous
Kolbert, Elizabeth. “Why Bitcoin Is Bad for the Environment.” The New Yorker, 22 Apr.
2021, https://www.newyorker.com/news/daily-comment/why-bitcoin-is-badfor-the-environment.
“According to the Cambridge Bitcoin Electricity Consumption Index, bitcoin-mining
operations worldwide now use energy at the rate of nearly a hundred and twenty
terawatt-hours per year. This is about the annual domestic electricity consumption of
the entire nation of Sweden. According to the Web site Digiconomist, a single bitcoin
transaction uses the same amount of power that the average American household
consumes in a month, and is responsible for roughly a million times more carbon
emissions than a single Visa transaction. At a time when the world desperately needs to
cut carbon emissions, does it make sense to be devoting a Sweden’s worth of electricity
to a virtual currency? The answer would seem, pretty clearly, to be no. And, yet, here
we are.”
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PRO: US gov should increase regulation utilizing central bank
digital currencies
Argument: Cryptocurrencies could be used by central banks.
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“To date, governments (Venezuela excepted) generally have not been directly involved
in the creation of cryptocurrencies; one of the central goals in developing the
technology was to eliminate the need for government involvement in money creation
and payment systems. However, cryptocurrency’s decentralized nature is at the root of
certain risks and challenges related to its lack of widespread adoption by the public
and its use by criminals. These risks and challenges have led some observers to
suggest that perhaps central banks could use the technologies underlying
cryptocurrencies to issue their own central bank digital currencies (CBDCs) to realize
certain hoped-for efficiencies in the payment system in a way that would be “safe,
robust, and convenient.”
Context: There is intense debate in the crypto and banking community about the
implementation of a central bank digital currency
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“Central Bank Digital Currency (CBDC)—fiat currency issued by central banks in digital
form—has progressed in the past few years from a bold speculative concept to a
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seeming inevitability. More than 80% of central bank respondents to a Bank for
International Settlements survey in 2019 reported engagement in CBDC projects [1].
One in ten of these banks, representing approximately one-fifth of the world’s
population, deemed it likely that they would offer CBDCs within the next three years.
The People’s Bank of China, whose plans are well in advance of that of other major
economic powers, has begun to pilot a digital yuan [2]. Hearings on CBDC have taken
place this year in the U.S. House Committee on Financial Services [3]. The European
Central Bank has initiated a project to explore CBDC development [4] while Sweden (an
E.U. but not Eurozone member), has begun testing a CBDC known as the e-krona”
Context: History has shown that the model for various currencies has been ineffective in the
past and required a centralized currency fix
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“Another challenge in an economy with multiple currencies—as would be the case in an
economy with a fiat currency and cryptocurrencies—is that the existence of multiple
currencies adds difficulty to buyers and sellers making exchanges; all buyers and sellers
must be aware of and continually monitor the value of different currencies relative to
each other. As an example, such a system existed in the United States for periods before
the Civil War when banks issued their own private currencies. The inefficiency and costs
of tracking the exchange rates and multiple prices in multiple currencies eventually led
to calls for and the establishment of a uniform currency.”
Warrant: The implementation of an effective centralized bank digital currency can optimize
compliance with regulations and law enforcement
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Allen, Sarah, et al. “Design Choices for Central Bank Digital Currency.” Brookings,
Brookings, 23 July 2020, https://www.brookings.edu/wpcontent/uploads/2020/07/Design-Choices-for-CBDC_Final-for-web.pdf.
“Ensuring compliance with anti-money laundering/combating financing of terrorism
(AML/CFT) regulations has been a major challenge for government authorities. The
elimination of physical cash could assist in these efforts, although the likely shifting of
illicit fund transfers to decentralized payment systems and intermediated through
anonymous, decentralized cryptocurrencies could vitiate this progress. This is one
reason why central banks might seriously consider issuing CBDCs so they can retain
control of or at least oversight over payment systems that could as easily be used for
illicit as for licit purposes.”
Impact: Centralization of digital currencies would be beneficial by increasing stability in
financial systems
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“Numerous observers assert that CBDCs could provide certain benefits. For example,
some proponents extend the arguments related to cryptocurrencies providing efficiency
gains over traditional legacy systems to CBCDs; they contend that central banks could
use the technologies underlying cryptocurrencies to deploy a faster, less costly
government-supported payment system.122 Observers have speculated that a CBDC
could take the form of a central bank allowing individuals to hold accounts directly at
the central bank. Advocates argue that a CBDC created in this way could increase
systemic stability by imposing additional discipline on commercial banks. Because
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consumers would have the alternative of safe deposits made directly with the central
bank, commercial banks would likely have to offer interest rates and security at a level
necessary to attract deposits above any deposit insurance limit.123”
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PRO: Regulation is good economically
Argument: Regulation is good for the economy
Warrant: Regulations set important standards
How Regulations Benefit the Economy. (2021). World Economic Forum.
https://www.weforum.org/agenda/2018/07/three-cheers-for-regulation
“Many regulations play this standard-setting role. Contrary to the simplistic view that
regulation is inevitably bad for business, there are in fact three important channels
through which regulation can benefit an economy. One is the market-creating and
market-growing role illustrated by the GSM standard. When there are competing
technological approaches, such as the famous contest in the 1970s between the
Betamax and VHS standards for videotape, consumers are better served if these
contests between similar standards are settled promptly and decisively, to preclude
the risk of spending money on a losing technology. When the standard is set by
regulation in a large market like the EU, the United States, or China, economies of scale
kick in quickly. The virtuous circle of falling prices, quality improvements, and growing
demand is thereby established.”
Warrant: Regulation enhances competition
How Regulations Benefit the Economy. (2021). World Economic Forum.
https://www.weforum.org/agenda/2018/07/three-cheers-for-regulation
“Regulation can also benefit an economy by enabling competition. This seems
counter-intuitive, and indeed some forms of regulation serve to enable rent-seeking
behavior. Businesses in oligopolistic sectors often complain about the burden of
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compliance; but they clearly rely on regulation as a barrier to market entry by new
competitors. The cost of their regulatory burden is a fee they pay for market power.”
Argument: Crypto Regulation is Important
Warrant: Regulation will increase trust
Gebbing, H. (2021, August 16). Regulation will boost crypto’s legitimacy. Tech Crunch.
https://techcrunch.com/2021/08/16/regulating-crypto-is-essential-to-ensuringits-global-legitimacy/
“To address the challenges of the fast-evolving blockchain ecosystem, the European
Union has begun to introduce more stringent financial regulations that further bolster
the regulatory system in order to improve licensing models. Many member states now
regulate crypto assets individually, and Germany is leading the way in being the first to
regulate cryptocurrencies. These individual regulations clearly prescribe the pathway
for crypto companies, outlining the requirements for obtaining and maintaining a
financial license from the regulator. Compliance naturally boosts investor confidence
and protection.”
Warrant: Regulations will end crypto’s “outlaw days”
Gebbing, H. (2021, August 16). Regulation will boost crypto’s legitimacy. Tech Crunch.
https://techcrunch.com/2021/08/16/regulating-crypto-is-essential-to-ensuringits-global-legitimacy/
“Activity can already be monitored through a collective database of users known to
abide by international standards. This knowledge of approved users and vendors
allows the industry to spot misconduct or malfeasance far sooner than usual, singling
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out and restricting illegitimate users. By means of a well-thought-through tweaking of
the suggested regulations, a verified network can collectively be built to ensure trust
and properly leverage blockchain’s potential, while barring those bad actors intent on
corrupting or manipulating the system. That would be a huge step forward in
prosecuting international financial crimes and ensuring crypto’s legitimacy globally.
Crypto’s outlaw days are over, but it’s gained an unprecedented level of legitimacy
that can only be preserved and bolstered by abiding with regulatory oversight.”
Analysis: This response shows that even if some regulations are bad, there are unique
advantages to regulating the crpyto sector. Emphasize the value of specific analysis over
generalities.
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PRO: Regulation is preferable to an outright ban
Argument: Banning crypto is a bad idea – regulation is the more reasonable policy
Warrant: Governments should be evenhanded
Andrews, D. (2021, May 27). Banning Bitcoin is a bad idea. Atlantic Council.
https://www.atlanticcouncil.org/blogs/new-atlanticist/banning-bitcoin-is-a-badidea/
“First is the overarching principle of technology neutrality—that we should develop
policies and laws that apply evenhandedly across technologies and time. For instance,
if we say we do not like Bitcoin because it can be used by bad actors, would that
position also apply neutrally to other financial technologies and instruments? The
bad-actor scenario could also occur with a duffle bag filled with $100 bills. The US
Treasury Department has printed about twelve billion $100 bills, 80 percent of which
are in circulation outside the country. Additionally, would a Bitcoin ban apply equally to
other digital assets that cost more than $30,000 (the current value of Bitcoin)—or
$10,000 or even $1?”
Warrant: A ban could hurt many Americans
Andrews, D. (2021, May 27). Banning Bitcoin is a bad idea. Atlantic Council.
https://www.atlanticcouncil.org/blogs/new-atlanticist/banning-bitcoin-is-a-badidea/
“Second, we have to think through what a firm ban would actually mean for an asset
that an estimated forty-six million Americans now own. Would the plan be to
prosecute anyone who does not hand over their Bitcoin and threaten them with jail
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time? Criminalizing 14 percent of the US population for mere possession of encryption
keys would pose a form of mass incarceration that is, among other things, antithetical
to the current political consensus on criminal-justice reform. How many thousands of
judicial proceedings would the confiscation of all those Bitcoin require? Would the
federal government plan to reimburse citizens for the billions in dollars in property it
confiscates? (By way of comparison, in the 1930s the US government ordered
restrictions on certain uses of gold, which were the subject of intense litigation and
were narrowly upheld by the Supreme Court. Notably, the right to own gold was
restored in the 1970s.)”
Argument: Bans are unrealistic
Warrant: There is no indication that banning crypto would reduce cyberthreats
Smith, S. S. (2021, July 27). Calls To Ban Crypto Make Headlines, But They Ignore Reality.
Forbes. https://www.forbes.com/sites/seansteinsmith/2021/07/26/calls-to-bancrypto-make-headlines-but-they-ignore-reality/?sh=66330da42508
“Cryptocurrencies have long been viewed, by some, as convenient things to blame for
cyberattacks, ransomware, and other digital criminal activity. The issue at hand,
however, is that even though ransomware payments made in bitcoin or other crypto
certainly make for splashy headlines, focusing only on these ignores two facts. Firstly,
cybercrime and cybersecurity related issues existed long before bitcoin and other
cryptoassets burst into the financial landscape. Criminals are adept at finding tools to
enable criminal activity; there is no indication that banning cryptoassets would reduce
cyberthreats.”
Warrant: Regulation can solve crypto issues
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Smith, S. S. (2021, July 27). Calls To Ban Crypto Make Headlines, But They Ignore Reality.
Forbes. https://www.forbes.com/sites/seansteinsmith/2021/07/26/calls-to-bancrypto-make-headlines-but-they-ignore-reality/?sh=66330da42508
“Secondly, many of those same splashy crypto headlines ignore the fact that there
have also been several high profile recoveries of funds by law enforcement agencies.
The JBS bitcoin ransom recovery by the FBI was undoubtedly the highest profile
instance of this kind, but law enforcement agencies across the world have successfully
been cracking down on criminal enterprises seeking to leverage blockchain and
cryptoassets. Some purists might decry the increased regulatory and law enforcement
action, but reducing the criminal element in any sector should be viewed in a positive
light.”
Analysis: This argument shows that crypto need not be banned to achieve beneficial social
effects. Why use a heavy-handed ban with potentially negative secondary effects if less invasive
measures will do?
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PRO: Regulation has bipartisan support
De-link: Crypto regulations are popular
Warrant: Regulations are bipartisan
Davidson, L. (2021). Crypto Rules in Senate Bill Eyed for Bipartisan Rewrite. Bloomberg.
https://www.bloomberg.com/tosv2.html?vid=&uuid=7f991893-28b0-11ec-a34d6a4953465353&url=L25ld3MvYXJ0aWNsZXMvMjAyMS0wOC0wMy9jcnlwdG8tcn
VsZXMtaW4taW5mcmFzdHJ1Y3R1cmUtYmlsbC1leWVkLWZvci1iaXBhcnRpc2FuLX
Jld3JpdGU=
“Senators Ron Wyden and Pat Toomey are drafting a proposal to overhaul a
cryptocurrency provision in the $550 billion bipartisan infrastructure bill that traders
and investors have criticized as being overly broad and impractical. The bipartisan duo’s
more-targeted language would replace what’s in the bill the Senate is now debating -should their amendment get 60 votes on the Senate floor. It could also cause new
problems for the legislation, which was the product of several weeks of intense
negotiations between the White House and senators.”
Warrant: The issue has broad support
Davidson, L. (2021). Crypto Rules in Senate Bill Eyed for Bipartisan Rewrite. Bloomberg.
https://www.bloomberg.com/tosv2.html?vid=&uuid=7f991893-28b0-11ec-a34d6a4953465353&url=L25ld3MvYXJ0aWNsZXMvMjAyMS0wOC0wMy9jcnlwdG8tcn
VsZXMtaW4taW5mcmFzdHJ1Y3R1cmUtYmlsbC1leWVkLWZvci1iaXBhcnRpc2FuLX
Jld3JpdGU=
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“We’ve been trying to make sure the definitions reflect what really goes on in the digital
asset world, and we didn’t think the previous amendment did that, and so this effort is
to make sure that we’re really focused on the people who have the information,”
Senator Cynthia Lummis, a Wyoming Republican who focuses on crypto issues, said.
Regulating virtual currencies has become an area of bipartisan concern as the value
has exploded in recent years. Its use has also been tied to tax evasion, money
laundering and other illicit activities. Wyden said he is talking with Republicans who
want to be involved, including Ohio Senator Rob Portman, who wrote the current
language in the bill. Toomey said the talks are “constructive.”.”
Argument: Congress is already moving towards regulation
Warrant: A bill is headed for a vote
De, N. (2021, April 27). Congress Takes One Step Closer to Regulatory Clarity - CoinDesk.
Coindesk. https://www.coindesk.com/policy/2021/04/27/state-of-cryptocongress-takes-one-step-closer-to-regulatory-clarity/
“The U.S. House of Representatives passed H.R. 1602, the “Eliminate Barriers to
Innovation Act of 2021,” last week, sending it to the Senate, which referred it to the
Senate Banking Committee. If passed and signed into law, the bipartisan bill would
commission a working group to evaluate how the U.S. currently treats digital assets.
This might be the first major crypto bill to get anywhere in Congress. What’s more, it’s
one that, if passed, would have a direct impact on how the U.S. treats digital assets.
This could finally provide companies in this industry with some much-requested
regulatory clarity. The fact the bill has support from both parties is another mark in its
favor. Of course, if regulatory agencies don't act until this bill is implemented, it'll be
quite some time before any actual clarity is adopted.”
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Warrant: This bill is one of many
De, N. (2021, April 27). Congress Takes One Step Closer to Regulatory Clarity - CoinDesk.
Coindesk. https://www.coindesk.com/policy/2021/04/27/state-of-cryptocongress-takes-one-step-closer-to-regulatory-clarity/
“The entire House of Representatives passed the “Eliminate Barriers to Innovation
Act,” introduced by Reps. Patrick McHenry (R-N.C.) and Stephen Lynch (D-Mass.) in
March, making it the first major crypto-specific legislation to get through one of the
bodies of Congress. A number of other bills have also been introduced to define how
cryptocurrencies can or should be treated under U.S. law, but few have made any
progress. “It’s the first bill to address regulatory clarity for digital assets and digital asset
marketplaces to pass the house, and in a bipartisan fashion no less,” said Amy Davine
Kim, chief policy officer at the Chamber of Digital Commerce.
Representatives for McHenry and Lynch did not respond to requests for comment.”
Analysis: This argument shows that even if there are some issues in the government over
crypto regulation, these are acceptable costs and legislation can move forward regardless.
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PRO: Effective Regulation
Argument: Regulation can work
Warrant: Regulation never ends up hurting crypto
Why Regulation Won’t Harm Cryptocurrencies. (2021). Knowledge@Wharton.
https://knowledge.wharton.upenn.edu/article/why-regulation-wont-harmcryptocurrencies/
“Feinstein and Werbach put those concerns to the test and examined if price declines
follow cryptocurrency regulation in a country. “The answer there is, ‘Almost always
not,’” said Feinstein. That finding was the result of an exhaustive study by Feinstein
and Werbach of trading activity at several exchanges worldwide following key
cryptocurrency regulatory announcements. Their study found “almost entirely null
results,” they wrote in an article published April 25 in the Journal of Financial
Regulation. “From the creation of bespoke licensing regimes to targeted anti-money
laundering and anti-fraud enforcement actions, as well as many other categories of
government activities, we found no systemic evidence that regulatory measures cause
traders to flee, or enter, the affected jurisdictions.” Their findings “at last provide an
empirical basis” for regulation of cryptocurrency trading, they added.”
Warrant: Laisse-faire regulation is not the answer
Why Regulation Won’t Harm Cryptocurrencies. (2021). Knowledge@Wharton.
https://knowledge.wharton.upenn.edu/article/why-regulation-wont-harmcryptocurrencies/
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““Crypto enthusiasts assert that limited regulation encourages trading on domestic
exchanges and thus attracts development activity around a promising frontier
technology, while unfavorable regulations will cause trading to move offshore,”
Feinstein and Werbach wrote in a recent opinion piece in The New York Times. “But that
wasn’t the case in multiple countries, including the U.S., that are home to large and
active cryptocurrency exchanges. Despite concern from some in finance that strong
regulations would dampen enthusiasm for crypto or push trading to more laissez-faire
countries, we found few hints of price movement around regulatory events and no
evidence of capital flight.”"
Argument: Regulation could be good for crypto
Warrant: Regulation would increase confidence
Lisa Ventura. “Five ways faith can make a difference in the world” World Economic
Forum. 2014. https://www.weforum.org/agenda/2014/07/five-ways-faithmakes-a-difference/
“Securities and Exchange Commission, told the Senate Banking Committee that the SEC
is working overtime to create a set of rules for crypto markets to protect investors,
among other things. In response, both the crypto community and its critics have shared
their own thoughts. Among those speaking up is billionaire investor Mark Cuban.
“Personally, I think regulation built around existing fraud laws is not a bad thing,”
Cuban tweeted in a thread on Thursday. “It will require Proof of Authorship and
identity, but it won’t hurt innovation, nor slow anything down.” Instead, regulation
will “open the door for more people to confidently use ‘crypto,’” Cuban tweeted.”
Warrant: On balance, regulation would make crypto more transparent
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Lisa Ventura. “Five ways faith can make a difference in the world” World Economic
Forum. 2014. https://www.weforum.org/agenda/2014/07/five-ways-faithmakes-a-difference/
“Cuban acknowledged that a form of proof of authorship would remove the
anonymity some prefer to maintain in the crypto community, but ultimately, he thinks
the good of mandating such a thing would outweigh the bad. “If you require Proof of
Authorship for Smart Contracts ... the feds and [potential fraud] victims will have a
person/entity to sue or indict,” he said. “Probably at the cost of anonymous innovators,
but that’s the price that will be paid.” (Smart contracts are collections of code that carry
out a set of instructions on the blockchain.) Cuban also predicted which areas he thinks
will be increasingly regulated, according to his current understanding of the crypto
space.”
Analysis: This argument shows that regulation would actually be an affirmative good. Instead of
being lackluster the potential for upside is enormous and we should air on the side of
regulation to capture these benefits.
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PRO: Energy waste
Argument: Regulation can help reduce the energy-cost of cryptocurrencies.
Warrant: Mining, the process that creates bitcoin (the first cryptocurrency), is heavily energy
intensive
Kolbert, Elizabeth. “Why Bitcoin Is Bad for the Environment.” The New Yorker, 22 Apr.
2021, https://www.newyorker.com/news/daily-comment/why-bitcoin-is-badfor-the-environment.
“Mining is the process by which bitcoin is both created and accounted for. Instead of
being cleared by, say, a bank, bitcoin transactions are recorded by a decentralized
network—a blockchain. Miners compete to register the latest “block” of transactions
by solving cryptographic puzzles. The first one to the solution is rewarded with freshly
minted bitcoin. Miners today receive 6.25 bitcoins per block, which, at current values,
are worth more than three hundred thousand dollars. It’s unclear exactly who dreamt
up bitcoin, so no one knows what this person (or persons) was thinking when the mining
protocols were first established. But, as Ari Juels, a computer scientist at Cornell Tech,
recently explained to me, the arrangement seems to have been designed with equity in
mind. Anyone devoting a processor to the enterprise would have just as much stake in
the outcome as anyone else. As is so often the case, though, the ideal was soon
subverted. “What was quickly discovered is that specialized computing devices—socalled mining rigs—are much, much more effective at solving these puzzles,” Juels
said. “And, in addition, there are economies of scale in the operation of these mining
groups. So the process of mining, which was originally conducted by a loose
federation of presumably individual participants with ordinary computing devices, has
now become heavily consolidated.”
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Warrant: Environmental advocacy organizations attest to the urgency for action
Kolbert, Elizabeth. “Why Bitcoin Is Bad for the Environment.” The New Yorker, 22 Apr.
2021, https://www.newyorker.com/news/daily-comment/why-bitcoin-is-badfor-the-environment.
“Whether this is, in fact, the case is debatable. What’s beyond debate—or should be, at
least—is that this is a matter that shouldn’t be left to a local planning board to decide.
There’s no way for New York, or the U.S. as a whole, to meet its emissions-reductions
goals if old generating stations, rather than being closed, are converted into bitcoinmining operations. Greenidge may become the first mining firm with a “wholly-owned
power plant,” but, unless the state or federal government steps in, it won’t be the
last: another cryptocurrency firm, Digihost International, has already applied to New
York State’s Public Service Commission for permission to purchase a natural-gasburning station near Buffalo. As representatives of Earthjustice and the Sierra Club
recently put it, in a letter to officials of New York’s Department of Environmental
Conservation, “additional scrutiny . . . is essential to prevent the floodgates opening
for other retiring power plants.””
Warrant: The trend towards the “proof-of-stake” concept increases the concentration of
mining power
Crapo, Mike. “Exploring the Cryptocurrency and Blockchain Ecosystem: United States
Committee on Banking, Housing, and Urban Affairs.” Hearings | United States
Committee on Banking, Housing, and Urban Affairs, 11 Oct. 2018,
https://www.banking.senate.gov/hearings/exploring-the-cryptocurrency-andblockchain-ecosystem.
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”The environmental costs of the energy use of Bitcoin and other cryptocurrencies is so
vast that has been correctly and repeatedly compared to an environmental disaster.
No need to repeat how such energy mis-use and waste is massive—larger than the
energy use per year of a mid-sized advanced economy. Such an environmental disaster
has shamed even supporters of crypto who have become defensive given the
embarrassing evidence of such energy costs and pollution. But now zealot supporters of
crypto are pretending that this environmental disaster can be minimized or resolved
soon. Since using millions of computers to do useless cryptographic games to secure the
verification of crypto transactions is a useless waste of energy—as the same
transactions could be reported at near zero energy costs on an single Excel
spreadsheet—crypto zealots argue that such costs could be massively reduced if
crypto moves from energy-hogging PoW to less energy wasteful Proof of Stake. But as
we discussed above in detail, scalability of crypto transactions via PoS will be massively
concentrated in dangerous oligopolies—even more so than PoW—and therefore such
centralization of mining power will lead to most severe problems of security. So, there
is no free lunch here. Either crypto keeps on using energy-hogging and environmentaldisaster PoW or it will become an insecure, centralized, and dangerous system.”
Impact: The environmental impacts of Bitcoin mining are tremendous
Kolbert, Elizabeth. “Why Bitcoin Is Bad for the Environment.” The New Yorker, 22 Apr.
2021, https://www.newyorker.com/news/daily-comment/why-bitcoin-is-badfor-the-environment.
“According to the Cambridge Bitcoin Electricity Consumption Index, bitcoin-mining
operations worldwide now use energy at the rate of nearly a hundred and twenty
terawatt-hours per year. This is about the annual domestic electricity consumption of
the entire nation of Sweden. According to the Web site Digiconomist, a single bitcoin
transaction uses the same amount of power that the average American household
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consumes in a month, and is responsible for roughly a million times more carbon
emissions than a single Visa transaction. At a time when the world desperately needs to
cut carbon emissions, does it make sense to be devoting a Sweden’s worth of electricity
to a virtual currency? The answer would seem, pretty clearly, to be no. And, yet, here
we are.”
Analysis: This argument demonstrates that if mining is allowed to continue, it could have dire
impacts on the environment moving forward.
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A/2: Politics
No Link: Crypto Regulation through SEC is bipartisan and postdates their evidence.
Nikhilesh De, CoinDesk, 03-09-2021 ["US Lawmakers Introduce Bill to Clarify Crypto
Regulations", https://www.coindesk.com/lawmakers-digital-asset-regulation,
accessed 3-16-2021] Srikar T. S.
Congress may soon try to clarify digital asset regulation in the U.S. Reps. Patrick
McHenry (R-N.C.) and Stephen Lynch (D-Mass.) introduced legislation Tuesday to
create a working group composed of industry experts and representatives from the U.S.
Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission
(CFTC) to evaluate the current legal and regulatory framework around digital assets in
the U.S. The three other co-sponsors of the bill are Glenn Thompson (R-Pa.), Ted Budd
(R-N.C.) and Warren Davidson (R-Ohio). The ultimate goal of the legislation, called the
“Eliminate Barriers to Innovation Act of 2021,” would be to clarify when the SEC has
jurisdiction over a particular token or cryptocurrency (i.e., when it is a security) and
when the CFTC has jurisdiction (i.e., when it’s a commodity). U.S. regulations can often
appear lacking, with no clear rules on when a certain cryptocurrency is treated as a
security or not, with SEC enforcement actions providing much of the guidance in this
area. SEC Commissioner Hester Peirce, who is outspoken on the issue, tried tackling it
in 2020 by proposing a three-year safe harbor for projects to get off the ground. Under
the terms of the bill, Congress would create a working group within 90 days of the bill’s
passage composed of SEC and CFTC representatives. Non-governmental representatives
would come from a financial technology company, a financial services institution, small
businesses using financial technology, investor protection groups, organizations that
support investments in underserved businesses and at least one academic researcher.
Within a year, this group would be required to file a report analyzing current
regulations, the impact they have on primary and secondary markets and how the
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regime impacts the U.S.’ competitive position. The report would also look at how
custody, private key management and cybersecurity are currently treated under law,
and what future best practices for fraud prevention, investor protection and other
issues could look like. The report would also include recommendations for improving
primary and secondary digital asset markets, including their “fairness, orderliness,
integrity, efficiency, transparency, availability and efficacy.” Amy Davine Kim, chief
policy officer at the Chamber of Digital Commerce, told CoinDesk the legislation aims to
establish an organized, comprehensive regulatory framework for digital assets in the
U.S. “It brings together both the SEC and CFTC in a formal way, to work through some of
the key issues that have impacted legal clarity in the space for years,” Kim said. “Now
we have an opportunity to start addressing them in a methodical way with a number of
stakeholders.” The bill was originally supposed to be introduced Monday and
considered under a voice vote by the full House of Representatives, indicating broad
bipartisan support, according to Rep. Don Beyer (D-Va.), but was pulled due to
procedural actions taken by the Freedom Caucus.
No Link: Politics is dead, no matter what Biden cannot cross the aisle.
Paul Waldman Columnist covering politics for WaPo’s Plumline blog. “Joe Biden has to
move fast” December 2, 2020. WaPo,
https://www.washingtonpost.com/opinions/2020/12/02/joe-biden-has-movefast/
Once you realize that the public is neither aware of nor particularly concerned about
process questions, you can stop worrying about whether Republicans will squawk at this
appointment or that executive order — because they’ll squawk no matter what you do.
If it’s a good idea and you think the results will be good, then just do it. As quickly and
comprehensively as possible. As David Roberts of Vox observes: In 2009, Obama and his
aides made the mistake of thinking that their major initiatives had to be rolled out one
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at a time in sequence, because he had a finite store of “political capital” that had to be
spent carefully. But political capital is not something that exists apart from any
particular issue; it isn’t a special sauce that has to be poured on a policy in order to
make it palatable. And with the parties as polarized and unified as they are, political
capital has become all but meaningless. There may have been a time when a popular
president possessed so much capital that a senator from the opposition party would
feel compelled to support him on part of that president’s agenda, but that time is long
gone. There is no account Biden can draw on to turn Republican “no” votes into “yes.”
Thump: Other actions Biden has taken should have triggered the links.
David Knowles·Senior Editor, No Publication, 1-27-2021 ["Republicans who cheered
Trump's executive orders now grumble about 'record number' from Biden",
https://news.yahoo.com/republicans-who-cheered-trumps-executive-ordersnow-grumble-about-record-number-from-biden-212339699.html?guccounter=1,
10-10-2021] Srikar T. S.
Over the past week, a growing number of Republicans began sounding the alarm
about the number and content of executive orders being issued by President Biden.
“The first week in office, what has Joe Biden done? He’s signed an executive order
ending the Keystone pipeline, destroying 11,000 jobs,” Sen. Ted Cruz, R-Texas, said in a
Tuesday interview on Fox News. “The scale of Joe Biden’s executive orders and their
impact on Americans is stark,” Sen. Tom Cotton, R-Ark., said last week. Sen. Marco
Rubio, R-Fla., blasted Biden for issuing “more executive fiats than anyone in such a
short period of time, ever. More than Obama, more than Trump, more than anyone.
Second, these aren’t just normal executive fiats, this is literally going down the wish list
of the far left and checking all of them off.” Rep. Lauren Boebert, R-Colo., has been
especially vocal about her opposition to Biden’s executive orders. Biden has in fact been
on a record-setting pace for executive orders, signing more than 40 of them in his first
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week in office. Most, however, were written to overturn those of his predecessor,
Donald Trump. They have included an end to the travel ban from some majorityMuslim countries, a reversal in Trump’s immigrant enforcement policies, the rejoining
of the Paris climate accord, the cancellation of the permit for the Keystone XL pipeline
and an end to the policy of prohibiting transgender people from serving in the U.S.
military. After years of complaints that former President Barack Obama had used
executive orders as an end run around a deadlocked Congress, Republicans were silent
when Trump did the same thing. Not surprisingly, the pace of Trump’s executive
orders increased after Democrats retook control of the House of Representatives,
thereby blocking his prospects for passing legislation. By the time his term ended,
Trump had signed 220 executive orders in a single term. Obama, by comparison, signed
276 over his two terms. From a historical perspective, both pale in comparison to the
3,721 issued by Franklin D. Roosevelt in his 12 years in office, though the nature of the
orders, and the debate over whether they were better left to Congress to legislate, has
also changed over time. Roosevelt’s most consequential initiatives, including Social
Security and most New Deal programs, were enacted by legislation.
No Link: SEC regulation is increasing now.
Oscar Shine and Mitchell Nobel, 3-18-2021, "Biden May Tame the Crypto Wild West.
Why That's Good for Investors. ," No Publication,
https://www.barrons.com/articles/biden-may-tame-the-crypto-wild-west-whythats-good-for-investors-51616022415
President Joe Biden’s nominee for SEC chair, Gary Gensler, appears similarly openminded. Gensler has taught courses at MIT on blockchain technology, calling it a
“change catalyst.” In a previous term as chair of the Commodity Futures Trading
Commission, Gensler reformed the over-the-counter derivatives market without
undermining its vitality. He is now similarly positioned to shepherd a more mature
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blockchain industry. Other federal agencies have sought to protect investors by going
after bad actors. The CFTC, which has regulatory authority over crypto commodities such
as Bitcoin and Ethereum, has brought crypto enforcement actions under the
Commodities Exchange Act. In its recent complaint against tech entrepreneur John
McAfee and his bodyguard Jimmy Gale Watson Jr., the CFTC alleged a pump-and-dump
scheme that exploited McAfee’s fame to inflate the value of crypto assets like dogecoin.
This enforcement action would not be groundbreaking in a traditional market. But in the
crypto world, it signals that the CFTC is prepared to take action against those it believes
are engaging in market manipulation. Federal prosecutors have also unveiled
enforcement actions in the crypto sphere. The CFTC and the United States Attorney for
the Southern District of New York recently brought coordinated actions against BitMEX.
The CFTC filed a complaint alleging that BitMEX had executed futures transactions
without appropriately registering and ignored know-your-customer obligations. At the
same time, federal prosecutors indicted BitMEX executives for alleged violations of the
Bank Secrecy Act. Days after initiating this prosecution, the Department of Justice
published “Cryptocurrency: An Enforcement Framework,” emphasizing more than a
dozen different statutes that the DOJ could use to prosecute crypto-related crimes. The
DOJ made clear it intends to police the digital asset space, and there is no reason to
believe the new administration will abandon this push.
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A/2: Neoliberalism
Turn: Empirics prove Neolib Good
Quillette, 1-16-2016 ["How Capitalism and Globalization Have Made the World a Better
Place", https://quillette.com/2016/01/16/how-capitalism-and-globalizationhave-made-the-world-a-better-place/, 10-10-2021] Srikar T. S.
Just kidding, that’s not what happened at all. In fact, as the world has become more
capitalist and more globalized, the quality of life for the average person, and especially
for the average poor person, has increased substantially. In 1990, 37% of the global
population lived on less than $1.90 per day. By 2012, that number had been reduced to
12.8%, and in 2015 it was under 10%. The source of this progress isn’t a massive wealth
redistribution program; it’s massive wealth creation — that is, economic
growth. Economists David Dollar and Aart Kraay found that, in a global sample of over
100 countries, changes in the income growth of the bottom 40% of the world’s income
earners are highly correlated with economic growth rates. On the other hand, changes
in inequality contributed relatively little to changes in social welfare of the poor over the
last few decades. There is good reason to believe that the expansion of free
trade, facilitated by international organizations like the World Trade Organization (WTO)
and its predecessor, the General Agreement on Tariffs and Trade (GATT), have had
a considerable impact in accelerating the economic development of developing
countries. In the 1990s GATT facilitated reforms which moved 125 countries towards
freer trade by reducing the burden of government imposed trade barriers like tariffs.
This was the first serious attempt at trade reform for most developing countries at the
time, and arguably presents a unique natural experiment on the economic effects of
trade reform. In fact, a paper published by the National Bureau of Economic Research
(NBER), specifically examined how trade reforms facilitated by GATT affected the
economic development of the reforming countries. In the paper, the authors compared
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the trends in economic growth before and after trade reform in the reforming
countries. Then they compared those results to trends in economic growth of a control
group of countries which didn’t undergo trade reform. What they found was very
encouraging for proponents of free trade. Prior to reform, the economic development
of reformers and non-reformers was practically identical, but after reform, the
economic development of reforming countries accelerated while non-reforming
countries saw their economies stagnate and decline. The results suggest that
the reforms towards freer trade lead to an increase in income per capita of around
20% in the long-run, an effect so large that it almost certainly had a positive and nontrivial impact on poverty reduction. Similarly, other research has shown that more free
market trade policies result in lower rates of extreme poverty and child mortality in
developing countries. There are other benefits as well. One study on trade reform in
Indonesia found that reductions of import tariffs led to an increase in disposable
income among poor households, which allowed them to pull their children out of the
labor force, leading to “a strong decline” in the incidence of child labor. Unfortunately,
many activists have reflexively taken up the cause of opposing the expansion of global
capitalism, for a number of reasons. Western anti-sweatshop activists, for example, will
often argue in favor of government imposed barriers to trade with poor countries
because their working conditions are terrible in comparison to those in developed
Western nations. In their view, western consumers should not be promoting a cycle of
capitalist exploitation by buying products made in Vietnamese sweat-shops. But
satisfactory working conditions aren’t the natural state of mankind; they are a
consequence of decades of economic development. Erecting barriers to trade with
poor countries is surely a large impediment to their development, in fact, research
suggests that existing developed world tariffs depress economic growth rates in the
developing world by 0.6 to 1.6 percent per person, a considerably large effect.
Moreover, the sweat-shops which produce clothing for Westerners are often much
better than alternative forms of domestic employment. In poor countries like
Bangladesh, China, and Vietnam, the apparel industry consistently pays more than most
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other domestic industries. According to research by economist Ben Powell, in poor
countries “most sweatshop jobs provide an above average standard of living for their
workers.” Notably, a paper published in the Journal of Development Economics
found that the expansion of the garments industry in Bangladesh lead to an increase in
employment and income among young women, giving them the means to finance their
own education. Remarkably the authors found that, “the demand for education
generated through manufacturing growth appears to have a much larger effect on
female educational attainment compared to a large-scale government conditional
cash transfer program to encourage female schooling.” Foreign investment is also more
desirable than opponents of capitalism and globalization give it credit for. The
conventional wisdom among activists in wealthy countries is that multinational
corporations exploit poor workers in third world countries for cheap labor, profiting off
people working in sweatshop conditions. It should come as a surprise to the individuals
who hold this view to learn that 85% of people in developing countries believe that
foreign companies building factories in their countries is a good thing, according to Pew
Research. In fact, for all the talk of exploitative multinational corporations, research
shows that, in general, these corporations provide higher wages and better working
conditions than domestic employers in developing countries. Additionally, when
multinational corporations build factories in poor countries, it raises the demand for
low-skilled workers, resulting in higher wages for local workers. Consistent with this
fact, recent empirical evidence demonstrates that investment by foreign companies in
developing countries reduces both poverty and income inequality by raising the
incomes of low-skilled workers. Foreign investment can also make people in relatively
low-income countries better off by providing better or more inexpensive products. A
recent analysis published by the NBER found that foreign retailers like Wal-Mart greatly
reduce the cost of living for both the rich and poor in Mexico, making everyone along
the income distribution better off. Global capitalism is by no means a perfect
phenomenon. Many businesses do have questionable labor practices that are worthy of
contempt. And free market policies may in many instances lead to socially undesirable
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outcomes, sometimes on a large scale. However, the one-dimensional, automatic
denunciation of capitalism and the accompanying refusal to give it any credit for its
successes — as social media activists have done — reflects an uncompromising,
and quite frankly ignorant worldview. It is one in which capitalism is always bad, no
matter what the evidence tells us.
Turn. Neolib good for Environment
IRWIN, D. A. (2015). Free Trade under Fire: Fourth Edition (REV-Revised, 4). Princeton
University Press. https://doi.org/10.2307/j.ctt9qh0ch
Fortunately, the objectives of free trade and a cleaner environment often work
together. For example, numerous studies have traced the relationship between
pollution emissions and a country’s per capita income. They have generally found a
relationship shaped like an inverted U: as per capita incomes rise from low levels,
pollution increases, but beyond a certain point (about $5,000), further increases in
income tend to diminish pollution.70 The initial increase in pollution is due to
industrialization, while the decrease is due to cleaner production technologies and
more effective environmental regulation that come with higher incomes. Both Delhi
and New York City have traffic jams, for example, but the locally made cars and
scooters in developing countries tend to belch out worse fumes than those with
cleaner exhaust systems in the United States. Beyond the threshold, higher incomes do
not mean more pollution and lower incomes do not mean less pollution. To the extent
that trade increases a country’s income beyond the turning point in the inverted U
relationship, it helps indirectly to improve the environment. More directly, new
technology is cleaner technology and trade facilitates the diffusion of new technology.
Furthermore, the “dirty industry migration” hypothesis, that polluting industries will
move to developing countries where environmental regulations are lax, has received
little empirical support. There is no “race to the bottom” in environmental
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standards because the costs of abating pollution are not a significant determinant of
industries’ location, and consequently not a significant determinant of trade flows.71
No Impact: World is improving despite Neolib
Teixeira, R. (2017). Optimistic leftist - why the 21st century will be better than you think.
St Martins Press.
The first thing to note about the left's twenty-first century is that living standards
should rise very substantially and that is a very good thing. Indeed, the left will play a
central role in pushing that trend forward by saving capitalism from its tendencies
toward stagnation, periodic crises and inequality— capitalism's "Piketty problem." The
right has little interest in doing so; only the left has the proper incentive structure,
emerging coalition and ideological commitments to guide capitalism onto a new and
healthier growth path that can better support rising living standards. This will take
some time; cautious politicians and vested interests will resist change. But the political
and economic imperatives of building the opportunity state are clear and will become
more so over time, as the postindustrial progressive coalition continues to grow and
the demand for better economic performance becomes ever stronger. This demand
for better performance will eventually be met, even if gradually, with some setbacks
along the way. And as living standards get on a healthier trajectory, much of the left
agenda that seems difficult to push today will become much easier to sell to voters. As a
result, the opportunity state will be strengthened. A RICHER WORLD How much are
living standards likely to rise? Far more than people currently think. Consider the
developing world first. As globalization and economic development proceed in these
countries, we will more and more see not just the decline and possible elimination of
extreme poverty, but the rise of large swathes of the developing world to the living
standards currently enjoyed by the middle classes of the advanced world. Indeed,
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conventional projections indicate that world GDP per capita, currently only about onequarter of today's U.S. level, should be nearly 50 percent higher than the current U.S.
level by the end of this century.l Projections for individual countries highlight the
sweeping nature of likely economic changes in this century: Turkey, Mexico, Brazil,
India, Indonesia and South Africa by 2100 should have GDP per capita levels from 70
percent higher than the current level in the United States to more than double that
level. China is projected to have a GDP per capita level around two and a halftimes
today's U.S. level. And a long list of countries should have per capita incomes in 2100
from 35 to 65 percent higher than the current U.S. level: Nigeria, Pakistan, Philippines,
Cameroon, Senegal, Tanzania, Bangladesh, Vietnam, Cambodia, Honduras, El Salvador,
Guatemala, Costa Rica and many others. Another long list of countries is expected to
best the current U.S. per capita income level by amounts from 5 to 35 percent by 2100;
only a handful of countries, like Zimbabwe, Eritrea and Burundi, are projected to still be
below this level by 2100. In short, the world and most people in it should be much
richer by the year 2100. That means hundreds of millions—billions—of people
attaining a standard of living that would be characterized as middle class in today's
advanced countries. The left should see this development as very good news indeed.
Many, many more people across the world will be able to lead lives largely free of
material suffering, with comfort levels most global citizens can only dream about
today. That should be applauded vigorously. And material advance across the world
will create much more favorable conditions for the left's key priorities: the extension
and consolidation of democracy; the spread of modern, egalitarian norms on race,
gender and sexuality; and, of course, robust mixed economies—opportunity states—
that can combine the support citizens need to get ahead (education, health care, child
care, social insurance) with the judicious regulation and state investments in
infrastructure and science needed to ensure strong growth. Across the world, all these
priorities will become much easier to meet as many more countries become rich by
today's standards. Turning to the advanced world, as noted earlier GDP per capita
growth in the United States has been quite slow in the first part of the twenty-first
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century (only 0.9 percent per year) and household/family income growth even slower.
But better days are coming, partly because of delayed recovery from the Great Financial
Crisis, partly because of ongoing technological advance and partly because of better
policies that will increasingly be adopted to mitigate inequality and promote faster
growth. Even if future per capita income growth fails to match the pace of the late
twentieth century (which was itself slow by the standards of the immediate post—
World War Il period), the United States should be a far richer country by midcentury.
Thomas Piketty projects that per capita income growth will slow to about 1.2 percent
per year.2 Organization of Economic Cooperation and Development (OECD) projections
are somewhat more optimistic at 1.5 percent per year.3 Both, however, are significantly
lower than the 1.7 percent per year since 1973 and, especially, the 2.4 percent per year
from 1946 to 1973. But even under these projections, which reflect slow growth by
historical standards, the United States will become much, much richer by 2050. At 1.2
percent per year, per capita income will be 50 percent higher than it is today; at 1.5
percent per year it will be 66 percent higher. And if the United States can be returned to
its long-term post-1870 growth trajectory, 1.9 percent per year (still significantly lower
than the postwar years), per capita income will be 90 percent higher at midcentury than
today. A much richer country should mean much richer people, especially if growth is
reasonably well distributed, as will increasingly be the political and economic imperative
going forward. How much richer? Today, median family income is about $70,000 (2014
dollars); at a 1.2 percent growth rate, it would rise to $105,000 by midcentury. Median
household income, which includes single-person households, is lower—about $57,000
today—but would still rise to $86,000 by 4 2050 at this growth rate. At a 1.5 percent
growth rate, the corresponding figures for median family and household income would
be $116,000 and $94,000 by midcentury. And at the historic 1.9 percent per year growth
rate, the corresponding median incomes would be $133,000 and $108,000.
Framing: Scenario planning is key to deconstruct traditional thought and a necessary step to
have alt solvency.
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Naazneen Barma, Advance Publication Online, 11-06-2015[“‘Imagine a World in Which’:
Using Scenarios in Political Science ",
http://www.naazneenbarma.com/uploads/2/9/6/9/29695681/using_scenarios_i
n_political_science_isp_2015.pdf, 12-10-2020] Srikar T. S.
Over the past decade, the “cult of irrelevance” in political science scholarship has been
lamented by a growing chorus (Putnam 2003; Nye 2009; Walt 2009). Prominent scholars
of international affairs have diagnosed the roots of the gap between academia and
policymaking, made the case for why political science research is valuable for
policymaking, and offered a number of ideas for enhancing the policy relevance of
scholarship in international relations and comparative politics (Walt 2005,2011; Mead
2010; Van Evera 2010; Jentleson and Ratner 2011; Gallucci 2012; Avey and Desch 2014).
Building on these insights, several initiatives have been formed in the attempt to “bridge
the gap.”2 Many of the specific efforts put in place by these projects focus on providing
scholars with the skills, platforms, and networks to better communicate the findings and
implications of their research to the policymaking community, a necessary and
worthwhile objective for a field in which theoretical debates, methodological training,
and publishing norms tend more and more toward the abstract and esoteric. Yet
enhancing communication between scholars and policymakers is only one component
of bridging the gap between international affairs theory and practice. Another crucial
component of this bridge is the generation of substantive research programs that are
actually policy relevant—a challenge to which less concerted attention has been paid.
The dual challenges of bridging the gap are especially acute for graduate students, a
particular irony since many enter the discipline with the explicit hope of informing
policy. In a field that has an admirable devotion to pedagogical self-reflection, strikingly
little attention is paid to techniques for generating policy-relevant ideas for dissertation
and other research topics. Although numerous articles and conference workshops are
devoted to the importance of experiential and problem-based learning, especially
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through techniques of simulation that emulate policymaking processes (Loggins 2009;
Butcher 2012; Glasgow 2012; Rothman 2012; DiCicco 2014), little has been written
about the use of such techniques for generating and developing innovative research
ideas. This article outlines an experiential and problem-based approach to developing a
political science research program using scenario analysis. It focuses especially on
illuminating the research generation and pedagogical benefits of this technique by
describing the use of scenarios in the annual New Era Foreign Policy Conference
(NEFPC), which brings together doctoral students of international and comparative
affairs who share a demonstrated interest in policy-relevant scholarship.3 In the
introductory section, the article outlines the practice of scenario analysis and considers
the utility of the technique in political science. We argue that scenario analysis should
be viewed as a tool to stimulate problem-based learning for doctoral students and
discuss the broader scholarly benefits of using scenarios to help generate research
ideas. The second section details the manner in which NEFPC deploys scenario analysis.
The third section reflects upon some of the concrete scholarly benefits that have been
realized from the scenario format. The fourth section offers insights on the pedagogical
potential associated with using scenarios in the classroom across levels of study. A brief
conclusion reflects on the importance of developing specific techniques to aid those
who wish to generate political science scholarship of relevance to the policy world.
What Are Scenarios and Why Use Them in Political Science? Scenario analysis is
perceived most commonly as a technique for examining the robustness of strategy. It
can immerse decision makers in future states that go beyond conventional
extrapolations of current trends, preparing them to take advantage of unexpected
opportunities and to protect themselves from adverse exogenous shocks. The global
petroleum company Shell, a pioneer of the technique, characterizes scenario analysis as
the art of considering “what if” questions about possible future worlds. Scenario
analysis is thus typically seen as serving the purposes of corporate planning or as a
policy tool to be used in combination with simulations of decision making. Yet
scenario analysis is not inherently limited to these uses. This section provides a brief
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overview of the practice of scenario analysis and the motivations underpinning its uses.
It then makes a case for the utility of the technique for political science scholarship and
describes how the scenarios deployed at NEFPC were created. The Art of Scenario
Analysis We characterize scenario analysis as the art of juxtaposing current trends in
unexpected combinations in order to articulate surprising and yet plausible futures,
often referred to as “alternative worlds.” Scenarios are thus explicitly not forecasts or
projections based on linear extrapolations of contemporary patterns, and they are not
hypothesis-based expert predictions. Nor should they be equated with simulations,
which are best characterized as functional representations of real institutions or
decision-making processes (Asal 2005). Instead, they are depictions of possible future
states of the world, offered together with a narrative of the driving causal forces and
potential exogenous shocks that could lead to those futures.
Perm: Do the AFF and align, consult, and support anti-capitalist movements – it’s viable.
David Valentine, The George Washington University Institute for Ethnographic
Research, xx-xx-2012 ["Exit Strategy: Profit, Cosmology, and the Future of
Humans in Space on JSTOR",
https://www.jstor.org/stable/41857289#metadata_info_tab_contents, 10-102021] Srikar T. S.
In this paper, I argue that beyond the possibilities for new forms of capital investment
and profit, enabled by commercial space enterprise (and which, as I will show, are not
incidental by any means), it is actually this promise of a radically transformed human
social future that underwrites NewSpace discourses and activities.
Indeed, understanding NewSpace as only the latest incarnation of neoliberal capitalism,
this time written into the stars, impoverishes our understanding of how powerful
social actors shape deep human futures through cosmological commitments to radical
views of what it is to be human, and contributes to the narrative of a totalizing
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capitalism that can account for all human futures (cf. Gibson- Graham 2006). In
short, the practices of powerful social actors should not be reduced to the abstracted
workings of “the market” but rather, to be fully understood, they must be considered
as social, ideological, but also cosmological (Chesluk 2008, Ho 2009). II. Outer Space as
Exception4 Sitting outside under the hot Arizona sun at the Space Access conference in
Phoenix in April 2010, I ate lunch with an investment adviser, a venture capitalist-cumspace entrepreneur, and an aerospace engineer. In the midst of our conversation about
the commercial possibilities for space-based solar power, a space elevator, and a human
settlement on Mars, the venture capitalist/entrepreneur said, apropos of the broader
theme of space settlement: “the species depends on it.” I was struck enough by the
phrasing to write it down, but this was not an isolated claim. Indeed, NewSpace
discourse abounds with statements to the effect that their activities are ultimately
about the survival of the human species. Yet, while the Augustine report, Obama’s NASA
budget, and the Falcon 9 launches mark, for NewSpace advocates, transformative
moments in human history toward the goal of space settlement and speciespreservation, to most Americans (including anthropologists and critical theorists),
visions of space settlement and claims of its centrality to species survival are extreme
and fantastical visions, caught up in the closed loop of mid-20th century modernisms. As
the introductory essay to this collection argues, the social sciences have tended to treat
“outer space” and any future associated with it literally as an empty signifier, able to
represent all the fantasies of modernist futures but with none of the material
consequences social scientists assign to other modernist projects. The status of outer
space here is that of an exception to the rule. And yet, NewSpace claims to the
inevitability of a free market future in space (and its positive social outcomes) can
simultaneously be explained by contemporary critical accounts of the consequential
nature of globalized neoliberal capitalism and capitalist imaginaries of the future: the
exception can be folded into a total explanatory framework. For critical theorists on the
political left, the immediate suspicion is that the former (a human future in
space) stands as an alibi for the latter (a voracious and
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dehumanizing capitalism), a new colonial “spatial fix” (Harvey 2000) to resolve
capitalism’s inner contradictions. Indeed, while there is little critical attention to outer
space as a site of human sociality and politics, most of my discussions with
anthropologists and other social scientists about my project begin with this
assumption by my interlocutors. However, both responses are embedded
in contradictory assumptions: first, that any cosmological vision of
a transformative human future is necessarily always already extreme and thus
fantastical and unrealistic; yet, second, that there is an inevitability to the future of an
asocial and colonial capitalism, and to its dehumanizing effects. In effect, the faded
20th century promise of a human future in space stands as evidence of the failures of
modernist projects even as the engine of modernity—capitalism—has an aura of
inevitability, homogeneity, and totality (Collins 2008, cf. Gibson-Graham 2006, Ong
2006). As we discuss in the introductory essay to this collection, “the future” has come
to be interrogated by 20th century scholars as a mode of modern temporality, founded
in the emergence of the modern nation state and characterized by temporal
acceleration, the rejection of prophetic certainty, and the possibility for humans to
guide the what-might-be (Koselleck 2004), (though always with the hope that the
surprise of the future can be tamed and kept on track, see Collins 2008).
Anthropological engagements with the future, though, have tended to be relatively
minimal as Munn (1992) argued 20 years ago, in part due to anthropology’s
embarrassment with the blithe futurism of the 1970s. More recently, anthropologists
such as Miyazaki (2004) and authors in Rosenberg and Harding’s collection (2005) have
tried to tease out the social role of future imagining as it comes to inform and shape the
social practices of the present and form the contexts of immediately emergent futures.
Fewer have attempted to engage the political economies of particular and long term
futures. Other critical scholars have been more willing do so, but unlike NewSpace
proponents, these visions of the future tend to be of the end of capitalism on Earth, not
its extension into the cosmos. For example, in his introduction to Living in the End
Times, Slavoj Zizek (2010:x) writes— bluntly—that “the global capitalist system is
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approaching an apocalyptic zero-point.” Like David Harvey’s (2000) discussion of the
socialist future(s) that must inevitably arise out of the ruins produced by capitalism run
wild, Zizek explores new forms of socialism and environmental consciousness that could
(or should, or will) emerge in response. Sloterdijk (2005) in turn sees the issue of the
devastation to the global environment under capitalism— in particular, the role of fossil
fuels and energy—as a blind spot in critical theory, but one that will have historically
transformative social and political effects and that should therefore be addressed by
critical theorists. For all three, the end of the 20th century marked both the return of
the worst excesses of capitalism but also imminent possibilities for new forms of
political, social, and environmental consciousness, cast in socialist form, and
characterized by a renewed sense of commitment to communities and other species, a
human modesty toward Earth’s limits, and a retrenchment in consumption and resource
exploitation. For my lunch partners in Phoenix that afternoon, and for other NewSpace
advocates, the story of the future is quite different. It is outer space itself that has the
resources and literal space for humans to continue the exponential growth and
expansion of markets, societies, resource extraction, and product development, but also
to expand the sites of life, human creativity, and intelligence in the galaxy, in ways that
resonate strongly with the Singulatarians discussed by Farman (this issue). Rejecting the
“limits to growth” position evident in many policy circles since the 1970s (Meadows et
al. 1972), they cite the boundless amounts of energy, fuel, minerals, and land mass that
could be used to promote not only new sources of profit, but—and as I am arguing, just
as importantly— new possibilities for human freedoms, expression, and sociality (e.g.,
Hudgins 2002, Krone 2006, Lewis 1996, O’Neill 1976, Tumlinson 2005). Indeed, pointing
to the very environmental degradation that Zizek, Harvey, and Sloterdijk see in whole or
in part as presaging capitalism’s downfall, NewSpace advocates urgently insist that
entrepreneurial human settlements in outer space will resolve these problems by
enabling clean power through space-based solar power generation, the end of resource
wars through asteroid mining, and growing human prosperity by the expansion of free
markets into space. The ideology of the necessary relationship between
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entrepreneurialism and a rejuvenated human future has a strongly contemporary flavor,
activating social scientists’ understandings of the incessant search of globalizing— now,
literally universalizing—neoliberal capitalism for new resources, products, and markets,
and the negative consequences to both human communities and to the environment.
But can we dismiss NewSpace visions of space settlement as just more of the same, as
the new spatial fix, as only fantasies of capitalist expansion and extraction? GibsonGraham (2006) argues that critical treatments of neoliberalism as homogenous and
totalizing have in part helped build the ideological unity of late capitalism. Collins (2008)
has also argued, directly in relation to conceptions of the future, that contemporary
anthropology is actually aligned with neoliberal imaginaries by assuming that the market
is the inevitable shaper of the future. Following these arguments, it seems to me that if
we accept the argument that the market, or profit motive, are the only explanatory
frameworks for these activities, we ignore other central and consequential aspects of
the utopian visions at the heart of NewSpace endeavors. Harvey (2000) and Frederic
Jameson (2005) both argue that utopian thinking is a key mode for a progressive and
socialist politics, but that such a mode must account for spatial context, temporality,
and local conditions. The key here is to think about the utopian imaginations of
capitalists in the same terms, ones that do not simplify or homogenize them. And as I
will show, NewSpace activities are not simply in the realm of fantasy: companies are
actually building rockets, spaceports, and habitats. My overall point is thus very
simple: without denying the potential significance of outer space as a site for new
capital accumulation (and recognizing the desires of my NewSpace interlocutors for this
very thing), or the need to critically examine the implications of such a
phenemenon, we should not assume that such goals can explain private space
enterprise in toto. Real fears of species extinction, ideologies of exploration as key to
human nature, and a desire to escape the strictures of contemporary state
formations (and capital) are all powerful motivations for the hopes of space
settlement. These resonate strongly with capital’s need for a “spatial fix,” but they are
not the same thing. In the following pages, I examine some of the tensions within
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NewSpace utopian thinking and imaginations of the future, both to contribute to
debates about the complexity of contemporary capitalism; but also to ask how
cosmology (rather than only capitalist ideologies and profit motives) may explain the
extraordinary plans and work of NewSpace entrepreneurs and advocates. III. NASA,
NewSpace, and Commerce Entrepreneurial space enterprises are a relatively recent
phenomenon, emerging primarily in the US in the early 1990s, partly due to the end of
the Cold War, but also because advances in computer and material sciences have
recently enabled more recently established NewSpace corporations (such as SpaceX,
Bigelow Aerospace, XCOR, and Virgin Galactic) to design and build space-faring vehicles
and habitats independently of NASA. “NewSpace” was coined in 2006 by the SFF,
primary among a good number of nonprofit organizations that promote entrepreneurial
space activity, but early attempts to foster a commercial space industry stretch back to
students and followers of Princeton physicist Gerry O’Neill in the 1970s. O’Neill’s
proposals for human habitations in space (O’Neill 1977) are often cited by NewSpace
proponents as a key influence, and many of his former students and collaborators are
key figures in today’s NewSpace industries. The coinage of the term in 2006, however,
marks a historical moment in which several firms have had successes that make
commercial space enterprise seem imminent, and not a speculative fantasy. In 2009, for
example, Pacific Gas and Electric contracted with Solaren Corporation to obtain spacederived solar power; in late 2010, Virgin Galactic, the space tourism arm of Richard
Branson’s Virgin brand, conducted its first landing of its WhiteKnightTwo/SpaceShipTwo
at Spaceport America in New Mexico and announced plans to fly customers to
suborbital space by early 2013; and both Armadillo Aerospace and Masten Space
Systems successfully demonstrated rockets for lunar landing modules. The proposed
2011 NASA budget, as well as the end of NASA’s 30-year-long Space Shuttle program in
July 2011, solidified this sense of imminence, and NASA’s Obama-appointed top
administrators are strong supporters of commercial space enterprises. SpaceX’s
successful launches in 2010 and 2012 are just the latest evidence to NewSpace
proponents that a future secured by commercial space enterprise is within grasp.
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A/2: Regulation grows Crypto causing negative side effects
Turn: Crypto solves Cyberwars
Jagmohan Singh Sekhon, Medium, 10-28-2017 ["Why World War III will be a CYBER
War & how BlockChain can help Nations prepare their Cyber Defense…",
https://web.archive.org/web/20191120203017/https://medium.com/@jna1x
3/why-world-war-iii-will-be-a-cyber-war-how-blockchain-can-help-nationsprepare-their-cyber-defense-1ef78db28d9, 10-10-2021] Srikar T. S.
Historically, wars are fought over territory or ideology, treasure or tradition, access or
anger. When a war begins, the initial aggressor wants something, whether to own a
critical path to the sea or strategic oil fields, or “merely” to cause damage and build
support among certain constituencies. At first, the defender defends, protecting
whatever has been attacked. Over time, however, the defender also seeks strategic
benefit, to not only cause damage in return, but to gain footholds that will lead to an
end to hostilities, a point of leverage for negotiation, or outright conquest. Shooting
wars are very expensive and very risky. Tremendous amounts of material must be
produced and transported, soldiers and sailors must be put into harm’s way, and
incredible logistics and supply chain operations must be set up and managed on a
nationwide (or multi-national level). Cyberwar is cheap. The weapons are often coopted computers run by the victims being targeted. Startup costs are minimal. Individual
personnel risk is minimal. It’s even possible to conduct a cyberwar without the victims
knowing (or at least being able to prove) who their attackers are. Cyberwar can be
brutal, anonymous — and profitable. But the damage done by a cyberwar can be huge,
especially economically. Let’s follow that idea for a moment. One of the big reasons the
U.S. won the Cold War (and scored highly in many of its other conflicts) is because it had
the economic power to produce goods for war, whether capital ships or food for
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troops. A economically strong nation can invest in weapons R&D, creating a
technological generation gap in terms of leverage and per-capita effectiveness
compared to weaker nations. But cyberwar can lay economic waste to a
nation. Worse, the more technologically powerful a nation is, the more technologically
dependent that nation becomes. Cyberwar can level the playing field, forcing highly
connected nations to thrash, to jump at every digital shadow while attackers can coopt the very resources of the defending nation to force-multiply their attacks. Sony is
still cleaning up after the hack that exposed many confidential aspects of its relationship
with stars and producers. Target and Home Depot lost millions of credit cards. The
Snowden theft, while not the result of an outside hack, shows the economic cost of a
national security breach: nearly $47 billion. Cyberwar can also cause damage to physical
systems, ranging from electric power stations to smart automobiles. And when a breach
can steal deeply confidential information of a government’s most trusted employees,
nothing remains safe or secret. The U.S. Office of Personnel Management was
unwittingly funneling America’s personnel data to its hackers for more than a year. Can
you imagine? We think China was responsible for the OPM hack. Despite the gargantuan
nation’s equally gargantuan investments in America (or, perhaps, because of them),
China has been accused of many of the most effective and persistent penetrations
perpetrated by any nation. It’s official: NSA spying is hurting the US tech economy China
is backing away from US tech brands for state purchases as NSA revelations continue to
make headlines in newspapers all around the world. Providing additional reason to
worry, Russia and China have recently inked an agreement where they agreed to not
launch cyberattacks against each other. They have also agreed to share cyberwarfare
and cyberdefense technology, creating an Asian axis of power that can split the world in
half. On the other side of the geopolitical spectrum are the American NSA and British
GCHQ, two organizations who share signals intelligence and — if the screaming is to be
believed — spy as much upon their own citizens as enemies of the state. It is important
to note that the destabilization of Allied intelligence can be traced to Edward Snowden,
who ran to and is currently living in Russia after stealing a vast trove of American state
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secrets. Ask yourself who gained from the Snowden affair. Was it America? No. Was it
Snowden? Not really. Was it Russia? You betcha. China, of course, supplies us with most
of our computer gear. Every iPhone and every Android phone, nearly all our servers,
laptop computers, routers — heck, the entire technological core of American
communications — has come from China. The same China that has been actively
involved in breaching American interests at all levels. Russia and China. Again and again
and again. In the center of all this is the main body of Europe, where the last
two incendiary world wars were fostered and fought. Nations fall when they are
economically unstable. Greece is seeing the writing on the wall right now. It is but one
of many weak European Union members. Other EU members are former Soviet states
who look eastward towards Putin’s Russia with a mixture of fear and inevitability. This
time, Germany isn’t the instigator of unrest, but instead finds itself caught in the
middle — subject to spying by and active in spying on its allies — the only nearly-super
power of the EU. Here’s how the coming world Cyber War will play out An enemy (or
even a supposed “friendly” nation) decides it needs the strategic upper hand. After
years of breaches, it has deep access to nearly every powerful government and business
figure in the United States. Blackmail provides access into command and control and
financial systems. Financial systems are hit and we suffer a recession worse than the
Great Recession of 2008–2009. Our budget for just about everything (as well as our will)
craters. Industrial systems (especially those that might post a physical or economic
threat to our attacker) are hit next. They are shut down or damaged in the way Stuxnet
took out centrifuges in Iran. Any regrets, Edward Snowden? “I’d have come forward
sooner” The former NSA contractor turned whistleblower said during a Reddit questionand-answer session that the leaks have also improved security and encryption in Silicon
Valley. Every step America takes to respond is anticipated by the enemy — because the
enemy has a direct pipeline to every important piece of communication America
produces, and that’s because the enemy has stolen enough information to corrupt an
army of Snowdens. While this is all going on, the American public is blissfully in the dark.
Citizens just get angrier and angrier at the leadership for allowing a recession to take
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hold, and for allowing more and more foreigners to take American jobs. Europe, which
has always relied on America to keep it propped-up in the worst of times, will be on its
own. Russia will press in from the north east. ISIS will continue to explode in the
Middle East. China will keep up its careful dance as it grows into the world’s leading
economic power. India, second in size only to China and a technological hotbed
itself, remains a wild card, physically surrounded by Europe, the Middle East, China, and
Russia. India continues to live in conflict with Pakistan, and with Pakistan both unstable
and nuclear-tipped, Indo-Pak, too, is on the precipice. A world war is about huge
nations spanning huge geographic territories fighting to rewrite the map of world
power. Russia, China, ISIS (which calls itself the Islamic State), India, Pakistan, the US,
the UK, and all of the strong and weak members of the EU: we certainly have the cast of
characters for another global conflict. I could keep going (and, heck, one day I might
game the full scenario). But you can see how this works. If enemy nations can diminish
our economic power, can spy on our strategic discussions, and can turn some of our key
workers, they can take us out of the battle — without firing a single shot. We are
heading down this path now. I worry that we do not have the national or political will to
turn the tide back in our favor. This is what keeps me up at night. Cyber Terrorists Can’t
Cyber : Entering a skill free zone The Islamic State’s is running out of hackers after the
US announced the death of the Bangladeshi Siful Haque Sujan, aka Abu Khalid alBengali. Sujan was possibly the top ISIS hacker following the death-by-drone of Junaid
Hussain, aka TRiCK, aka Abu Hussain al-Britani.
Turn: Crypto key to activism and movements
No Author, No Publication, xx-xx-xxxx ["How Cryptocurrency Is Fueling Social Activism
Around the World – LGBT Foundation and Token", https://lgbt-token.org/howcryptocurrency-is-fueling-social-activism-around-the-world/, 10-10-2021] Srikar
T. S.
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Crypto and blockchain are changing the economic game and activists everywhere are
tapping into its potential as a force for good. Cryptocurrency is the great
unknown right now. As Bitcoin continues to circle in the news, more and more people
are wondering what, exactly, cryptocurrency can be used for. To many people, it’s an
intangible concept, one that doesn’t appear to have a practical use. Yet one unexpected
area in which cryptocurrency is proving hugely beneficial is activism. More than
ever, technology is being used as a platform and amplifier to tackle injustice, inequality,
and social issues on a global scale. Crypto and blockchain
are simply another technological tool in that arsenal. The beauty of cryptocurrency is
that it completely changes the potential for economics to help the most marginalized.
Since it’s open source and controlled by all, the cost of producing it is reduced to almost
nothing, and no one government, entity, or person can control it. By its very
nature, cryptocurrency is as democratic an economic model as we have, and
it’s leveling the playing field for those who were shut out of traditional economic
systems before. A lack of traditional money is no longer a barrier Consider that one of
the greatest barriers to any activist movement is money, specifically a lack thereof. The
majority of activist movements start out as grassroots endeavors, and grassroots means
paying for things out of pocket. Movements survive only if they can generate enough
funding or goodwill so that people are willing to work pro bono. The lower cost of
cryptocurrency means you can get more for less and limited funds will go further. This is
of particular importance in underdeveloped nations where large swaths of the poor and
rural populations are shut out of traditional banking systems. The poorest people in the
world may not have the documents or the funds to open a banking account, but
they likely have access to a mobile phone and the internet, which means they can
participate in crypto exchange. Similar to how the evolution of microloans gave people
with few resources the opportunity to start their own businesses, establish a steady
income, and provide for their families, cryptocurrency is already being rapidly
embraced in developing nations where poverty and wealth inequality are
pronounced. In Venezuela, for example, where political turmoil and economic
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dysfunction have reduced the worth of the official national currency to almost
zero, Bitcoin has become the number one alternative currency. With crypto, millions of
people can now purchase goods and basic necessities that they weren’t able to before,
as well as being able to circumvent import-export laws to purchase goods—sometimes
desperately needed—from overseas. Likewise, Bitcoin and crypto have become a
lifeline for people in numerous African nations where the collapse of their economies
and financial systems have made business and life all but unattainable for many. Not
only does it give them the means to live on a day to day basis, but a growing number of
citizens are using crypto to give them a savings buffer, such as in Zimbabwe, where the
hyperinflation and quick collapse of the banking system in 2008 sent the country into an
economic tailspin.
Turn: Fuels Internet of Things Growth
Op-Ed, Bitcoin News, 10-10-2021 ["Bitcoin Is the Fuel We Need for the Industrial
Internet of Things", https://news.bitcoin.com/bitcoin-fuel-industrial-iot/, 10-102021] Srikar T. S.
The Industrial Internet of Things The Industrial IoT is coming, bringing an
“unprecedented convergence of machines, data, and people, redefining the way we
work across industries,” said G.E. According to G.E.’s definition, “The Industrial Internet
is changing the way industries work. By combining Machine-to-Machine
(M2M) communication, industrial Big Data analytics, technology, cyber security and
automation, it is driving new levels of efficiency and productivity.” To succeed in the
Industrial Internet, G.E. is now entering the struggle for the software layer
supremacy against Microsoft, Google, and IBM. As the New York Times puts it, “It is the
next battlefield as companies fight to develop the dominant software layer that
connects the machines.” G.E. executives estimate that the Industrial Internet market
will reach $225 billion by the year 2020. The number of interconnected devices in the
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IoT continues to amaze observers. Last year, IDC forecast that by 2020, there will be
more than 30 billion interconnected devices. Specifically, IDC research estimates that
“the Internet of Things money market will grow from $655.8 billion in 2014 to $1.7
trillion in 2020 with a compound annual growth rate (CAGR) of 16.9%.” Internet of
Things Challenges industrial IoT The IoT already faces daunting challenges. Data
management, security, privacy, and reliability are some of the main IoT issues. Indeed,
the IoT explosion caught many business organizations unprepared. Most current
infrastructures, protocols, and business processes were not conceived to confront the
colossal challenges that the IoT presents. For example, the amount of data generated by
this vast universe of interconnected devices will be massive, leading some to believe
that corporations are not capable of extracting the benefits of IoT data. Adam Wray,
CEO, Basho Technologies, argues, “Internet of Things (IoT) data has the potential to
generate insights that will enable corporations to offer superior products.
However, most companies do not have the core infrastructure in place to start
leveraging IoT data.” The unprecedented amount of data being generated and collected
has even prompted the National Security Agency (NSA) to study the evolution of privacy
in the IoT context and to publish a report entitled “Privacy in the Internet of Things.”
Security and privacy IoT challenges also worry technology enterprises. According to
Microsoft, the converging of the cyber and the physical worlds makes security, privacy,
and compliance challenges unique to businesses worldwide. Resilient and secure IoT
infrastructures are crucial in a universe where billions of interconnected
devices exchange data and services, unattended, without human intervention. “In this
new world, the old thinking of disaster backup and manually executed recovery
procedures does not apply,” says Michael Puldy, Director of Global Business Continuity
Management for Global Technology Services, IBM. The Blockchain Can Help the
Industrial Internet of Things The challenges confronted by the IoT and now the
Industrial Internet highlight the fact that existing approaches to deal with security,
privacy, and resiliency issues are becoming obsolete. Consequently, we need new ways
of doing things. Bitcoin and its powerful blockchain technology can help to implement a
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dramatic paradigm shift. Granted, Bitcoin’s blockchain challenges are still being
addressed. Nevertheless, it is the strongest blockchain for IoT if we consider
its decentralized and trustless nature, making it resilient and always accessible. It can
reside in millions of devices or nodes distributed all over the planet. Each of these nodes
keeps and maintains the entire blockchain. If one node fails, all the others continue to
function, preserving the blockchain. The blockchain is transparent. Everybody can see all
the transactions registered in the blockchain. Also, alterations in the blockchain cannot
occur without being detected Bitcoin’s blockchain facilitates the automation of digital
businesses by allowing the execution, without depending on human intervention, of
smart contracts. Smart contracts are “computer protocols that facilitate, verify, execute
and enforce the terms of a commercial agreement,” as defined by Nick Szabo.
Moreover, assets and documents can also be digitally expressed as “Smart Assets.”
Thanks to its blockchain, Bitcoin is the ideal cryptocurrency for millions of smart devices
performing frictionless financial transactions, such as micropayments, in the IoT
universe.
Turn: Causes global governance which is key to solve every existential risk
Peter Schurman, HuffPost, 6-3-2015 ["A Better Approach to China",
https://www.huffpost.com/entry/a-better-approach-to-chin_b_7506036,10-102021] Srikar T. S.
Still, there's every reason to take a perceived threat from China seriously. It's the
world's most populous country, and as its economy has prominence over the past
decade, its industrial capacity, implicitly including war-making capability, have grown as
well. In some respects, this is the first time the US has faced such a situation since the
end of World War II. To be sure, we faced off against the Soviet Union throughout the
cold war, and our relations with post-Soviet Russia under Putin have been frosty. Yet,
while the nuclear threat has darkened this picture for decades, neither the Soviet
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Union nor Russia has been a top economic or industrial power, despite the recent oiland-gas wealth of its oligarchs. So now is an opportune time to ask whether we want
to continue the usual geopolitical power game, in which separate countries vie against
each other for resources and dominance, threatening everyone's survival, safety, and
rights, or whether a new, globally inclusive, democratic governance structure would
serve us better. We in the US may rightly condemn China's recent actions. Yet we should
also bear in mind that China's recent muscle-flexing follows inevitably from its economic
rise, given the perverse incentives of our fragmented global political structure. With the
world divided into separate nation-states, national governments can often keep order
within their borders, but they face a constant power struggle beyond, with no
legitimate entity truly in charge at the global level. (The UN is simply too weak.) Leaders
whose only accountability comes from within their borders can build their power at
home by elbowing their neighbors, so they do. This is especially true in countries with
ascendant economies, such as China today, or the US at many points over the past 100plus years. The structural inevitability of confrontations like the one now developing
with China should compel us to consider an alternative that has never been possible
until now: a single, global democracy, including everyone (holding dictators, terrorists,
and other criminals accountable to the rule of
law). With blockchain technology (the secure, distributed ledger underlying bitcoin) it's
now becoming feasible to securely record the votes of potentially limitless numbers of
people, online. Although related challenges remain (the secret ballot, unique voting
accounts, the digital divide) all of these appear solvable over the next decade or two,
and possibly sooner. Of course, it's important to consider what kinds of policies a single,
global democracy might lead to. Although the actions of major foreign governments,
such as China's, aretroubling in many respects, the point of a global democracy is to
take national governments, with their warped incentives, out of the picture,
and instead put global governance in the hands of everyone. In part, this is a matter of
faith in people's essential reasonableness, the wisdom of crowds, the better angels of
our nature, and the historical record, which has shown again and again that
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democracies, while fallible, generally produce fairer, more stable, and more peaceful
outcomes than any other system of governance. Yet it's also supported
by international polling data. The Pew Research Center has compiled a rich trove of
such data, including these highlights: A slim plurality of Chinese people say "our country
should have UN approval before it uses military force to deal with an international
threat." A plurality of Chinese people, along with a clear majority in India and majorities
in many Muslim countries (which together comprise another major population
group), prefer "a democratic form of government" rather than "a leader with a strong
hand". Overwhelming majorities in China, India, and Muslim countries see climate
change as a "serious problem", and say "people should be willing to pay higher prices in
order to address" it. There are limits to the depth of this data, but what we can see is
encouraging. Obviously, beyond the top-line appeal of a call for a global democracy lie
many key structural questions. For example: what constitutional rights should be
guaranteed to everyone? And how should inclusive deliberation and voting should be
structured? These are beyond the scope of this article, but they're an exciting area for
discussion; a forum for that conversation is here. The archaic division of our world into
separate nation-states leads inevitably to dangerous geopolitical rivalries. It also
prevents adequate global action on climate change (notwithstanding the recent USChina agreement), cripples our response to disease outbreaks, makes it impossible
to rein in economic inequality, and traps people worldwide in poverty. In all of these
ways, the present system is failing us. Until recently, one could argue that we couldn't
do much better: national borders have crudely reflected humanity's technological and
administrative limits for centuries. But today, for the first time in history, a better
solution is within our grasp: one global democracy
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A/2: Courts
No Impact: They are expediting important cases
Susan Decker & Ian Lopez, “Covid-Related U.S. Patents Get Fast Track for Small
Business”, https://www.bloomberg.com/news/articles/2020-05-08/covidrelated-u-s-patents-to-be-fast-tracked-for-small-business, May 8th, 2020
Small businesses working on coronavirus-related drugs or treatments can get patents in
as few as six months under a new program announced by the U.S. Patent and
Trademark Office. “Independent inventors and small businesses are often the
difference makers when it comes to cutting-edge innovation and the growth of our
economy,” patent office Director Andrei Iancu said in a statement on Friday. “They are
also in most need of assistance as we fight this pandemic.” A typical patent
application takes about 15 months just to get a first response from an examiner,
according to the agency’s annual report. Companies can pay extra fees to get an
expedited review, though few applicants take that route. The new prioritized review
won’t cost extra money, but it’s limited to firms that can be classified as a “small or
micro” entity, which would include independent inventors, companies with fewer than
500 employees, people working for institutes of higher education, and non-profit
groups. These groups already pay less in regular application fees than big companies.
The applications also “must cover a product or process that is subject to U.S. Food and
Drug Administration approval for use in the prevention and/or treatment of Covid-19,”
the agency said. Small companies often have trouble attracting investors to help fund
their research, and patents are one criteria to insure venture capitalists that they
might get a return on their investment. Patents give their owners a limited exclusive
right to their work in return for making the invention public. “They’re trying to do as
much as they can to spur innovation,” said Christopher Halliday, a partner at Morgan
Lewis in Philadelphia who said he has a client who’s already planning to make use of
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the program. The fast-track process is geared toward “the small entities and microentities -- your garage inventors, if you will -- the innovation engine in a lot of ways,”
Halliday said.
No Link: When corona opens up they will go towards criminal cases, not civil cases like the AFF
Edge Staff, Edge, 5-6-2020 ["How Coronavirus Has Stifled the Criminal Justice System",
https://apuedge.com/how-coronavirus-has-stifled-the-criminal-justice-system/,
10-9-2021] Srikar T. S.
The coronavirus has also significantly affected the state and federal court systems, in
some cases bringing them to a near standstill. Prior to the spread of COVID-19, many
courts had lengthy backlogs of criminal and civil cases. The past few months have
exacerbated the backlogs and jeopardized the constitutional rights of defendants. The
Sixth Amendment provides criminal defendants the right to a speedy and public trial,
but the pandemic has significantly impeded the courts from providing these rights to
defendants. [Related: Holding Prosecutors and Judges Accountable for Unequal Justice]
Court systems are struggling to figure out how to deal with defendants awaiting trial but
who currently cannot be tried due to coronavirus restrictions. Many of these individuals
are awaiting trials while incarcerated as the judiciary determines how to safely proceed.
For example, the judiciary is struggling to determine how to proceed with jury trials that
require jurors to be seated in close proximity in the courtroom and in small deliberation
rooms. Is it time for prosecutors to seek alternative dispositions to those awaiting trial
so as to move cases forward and begin reducing the growing backlog? The coronavirus
pandemic has affected every level of the judiciary, including the Supreme Court of the
United States, which postponed oral arguments for March and April. Oral arguments
are a vital part of the judicial process that occurs before the Court’s opinions are
drafted. These postponements resulted in about 20 cases being put on hold, some of
which could have important consequences for the Executive Branch. Beginning this
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month, the Supreme Court will take unprecedented steps and conduct a series of oral
arguments via telephone conference. It will also provide real-time, live streaming of oral
arguments for the first time in the Supreme Court’s history. Changes to Corrections
Finally, COVID-19 has significantly affected prisons throughout the United States.
Prisoners live in close quarters and cannot maintain any type of social distancing. Prison
personnel also cannot avoid close and daily contact with prisoners, putting both groups
at increased risk of exposure. Many states and federal confinement facilities have
instituted measures to release nonviolent criminals early to reduce the prison
population and make it safer for remaining prisoners and prison employees. For
example, Attorney General William Barr has directed the Bureau of Prisons to prepare
the release of nonviolent inmates, especially in areas heavily affected by the
coronavirus. In a memo dated April 3, the Attorney General noted that recent legislation
“now authorizes me to expand the cohort of inmates who can be considered for home
release upon my finding that emergency conditions are materially affecting the
functioning of the Bureau of Prisons.” Barr further stated that in response to the
legislation, “I hereby make that finding and direct that … you give priority in
implementing these new standards to the most vulnerable inmates at the most affected
facilities.” Many states have implemented similar measures and have released
nonviolent offenders to help to avoid the spread of the coronavirus. Research Needed
to Understand the Total Impact of Coronavirus on the Criminal Justice System While we
are still in the midst of combating the spread of COVID-19, it is difficult to predict its
long-term effects on the criminal justice system. Backlogs, for example, have extended
from months to a year or more, according to a judicial assistant in the Arizona
Superior Court who is also a current American Military University master’s student.
When trials resume, the preference will be on criminal cases in order to meet the
constitutional mandates afforded to criminal defendants. To better understand the full
picture will require criminal justice leaders and administrators to collaborate with
researchers and academics to collect data and assess the ongoing changes brought
about by the coronavirus pandemic. The outcomes and lessons learned from such
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research will hopefully help law enforcement personnel and criminal justice leaders and
administrators to be better equipped and prepared to handle any future emergency
situations facing the nation.
UQ Overwhelms the Link: Corona fundamentally changed the system to solve clog
Bridget Mary, TheHill, 6-22-2020 ["Leveraging technology for long-term change in the
face of COVID-19", https://thehill.com/opinion/technology/503919-leveragingtechnology-for-long-term-change-in-the-face-of-covid-19, 10-9-2021] Srikar T. S.
The COVID-19 pandemic has laid bare the lack of technology and the archaic rules and
processes embedded in our justice system. As we think about a post-pandemic world,
even when we’re still in the thick of this crisis, every federal office, state capitol,
courthouse and mayor’s office should be asking: Why is our system of justice held
together with the threads of 20th century technology and 19th century processes? Also,
what new practices have we developed in response to this crisis that might serve us well
after we recover? Changes made on the heels of this pandemic could erase decades of
currently inadequate procedures put in place before laptops, email, text messages, or
the Internet. For instance, parole officers in many states have to submit paper updates
in person, prosecutors have weeks to respond to court orders to allow time for paper
processing and first appearances often require all parties to be physically present. The
urgent responses we’re seeing from jurisdictions across the country show that change
and innovation are possible. Leaders are swiftly overhauling technical practices in the
face of life-threatening consequences and we have a unique opportunity to leverage
this creative thinking and these efficient responses to create long-term and muchneeded change for our criminal justice systems. We must make this commitment to
innovation our new normal. With unique and acute pressure to protect public health,
leaders are finding creative ways to adapt to COVID-19 and many are utilizing existing
technology. For example, jurisdictions across the country are: expediting the process of
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a first hearing after an arrest; making determinations immediately on detention or
release, so as not to unnecessarily detain a person; and using technology to move
processes forward (e.g., holding prompt hearings online or over the phone,
communicating decisions more efficiently by email and resolving issues with quick
information sharing in protected digital formats). When we take the hundreds, maybe
thousands, of emergency responses and put them together, a new portrait of the
criminal justice system emerges. It includes updated technology, revised rules and
processes that enhance the delivery of justice. Switching to more automated
processes would result in a more efficient and resilient system for the individuals
affected by it and for those working in the courts. Automation will yield significant
savings by reducing burdensome agency workloads. Centralized processes will build
efficiency. Once we all see that documents can be electronically filed and transmitted
instead of slowly and physically moving through every hand in the judicial process,
large scale change will become not just possible but inevitable. Take Clean Slate
legislation, which creates a pathway for automatic clearance of certain criminal records
when an individual remains crime-free for a set time. Utah and Pennsylvania both have
Clean Slate policies. In 2018, Pennsylvania became the first state to pass Clean Slate
legislation, and it is now implemented. The state has since cleared nearly 35 million
records that held people back from jobs, housing, education and other critical parts of
daily life. Automation allows people to get on with their lives. While traditional
expungement practices have ground to a halt across the country with court closures
and other COVID-19-related delays, Pennsylvania cleared three million records in
March and April alone due to the automated process. Removing employment barriers
for individuals with records will also benefit our communities and promote our national
recovery in the wake of this pandemic because those same workers put the money they
earn back into their local economies. If we fail to enact policies and update technology
for people with records to participate in the economic recovery, we’ll leave behind
nearly one-third of the U.S. workforce and tens of millions of vulnerable families. In
Michigan, prior to the pandemic, we had already begun the process of opening the
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virtual doors of our court system. For example, our online legal resource was helping
more than 1.5 million users each year who were accessing dozens of toolkits on topics
ranging from divorce to landlord/tenant disputes. Now, 10,000 people a day use the
site, with many users looking for information about their rights to unemployment
insurance and other benefits. Our pioneering online dispute resolution platform, MIResolve, has made Michigan the first state in the nation to provide a way for every
resident to resolve disputes without a lawyer. Going forward, we need to be just as
creative to make sure that all self-represented litigants can resolve their legal issues
without the burden of taking off work, getting child care and going to court. Over the
past decade in Michigan, we have been building an online infrastructure so the shift to
virtual courtrooms has been seamless. Since every courtroom in the state was equipped
with videoconferencing systems and judges already had Zoom licenses, our judiciary has
held 200,000 hours of hearings via Zoom over the past two months. Quick work by our
technology team facilitated streaming those hearings on YouTube and the public can
watch it all with the help of our Virtual Courtroom Directory. Meanwhile, we are pilot
testing the use of text messages to notify the public of hearings or other court
events. Dentists and cable guys can do it, why not courts? Making these improvements
to our criminal justice system includes changing decades-old practices and committing
to the necessary costs of technological improvements and training. These changes will
not be easy, but the emergency procedures implemented in the face of the COVID-19
pandemic have shown us that they are achievable. Let’s make sure that the resources
we infuse into the system are not just temporary patches. We have a chance to rebuild
what we do from the ground up. Let’s create a 21st century criminal justice system that
is effective, transparent, efficient and fair
Thump: CJR Regulation happening now
Greg Moran, San Diego Union-Tribune, 11-24-2019 ["Some criminal justice reform
measures taking hold slowly as judges and prosecutors oppose them",
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https://www.sandiegouniontribune.com/news/courts/story/2019-11-24/somecriminal-justice-reform-measures-taking-hold-slowly-as-judges-and-prosecutorsoppose-them, 10-9-2021] Srikar T. S.
For more than half a decade the state Legislature has churned out scores of bills and
new initiatives aimed at disassembling a vast criminal justice system built over nearly 40
years on tough-on-crime laws that increased punishments and swelled state prison
populations. The blizzard of new laws has put the state at the leading edge of the
national criminal justice reform movement that aims at reversing mass
incarceration policies by reducing prison sentences, opting for rehabilitation over
punishment, and mandating new approaches to policing and prosecution. Yet since the
start of the reforms in 2011, when the Legislature passed a law known as public safety
realignment that reconfigured the state penal system and kept more non-violent
offenders in local jails instead of state prisons, prosecutors and law enforcement groups
have opposed many of the changes. That opposition is reflected in how two
major criminal justice reform laws are playing out nearly every day in courtrooms far
from the legislative hallways of Sacramento. Data gathered by The San Diego UnionTribune shows that more often than not prosecutors in six major counties — which
collectively account for two of every three inmates sent to state prisons — are opposing
bids by offenders seeking reduced sentences for accomplice-murder convictions or pretrial diversion to mental health treatment instead of prosecution. The data show
that two ambitious — and controversial — criminal justice reform laws passed by the
Legislature are slow to gain much traction in these courthouses, though opposition by
prosecutors is not the only reason that’s happening. The felony murder law has been
challenged on constitutional grounds in appellate courts, for example. Every case is
different and has to be looked at on its own. Also, the final call on whether or not a
defendant wins is made by judges. Still criminal justice reform advocates, some of
whom worked to pass the laws and are continuing to push for more reforms, say
they are not surprised. “This is in many ways the crux of the challenge when it comes to
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criminal justice reform,” said Lenore Anderson, the president and founder of
Californians for Safety and Justice. “Much of the reform is enacted through policy
changes in state laws. But, that change in state laws is only as impactful as it is
implemented, on the ground.” The Union-Tribune asked district attorneys from San
Diego, San Bernardino, Los Angeles, Orange, Sacramento and Riverside for information
on the number of cases of people seeking resentencings under Senate Bill 1437, which
made changes to the felony-murder law, and Assembly Bill 1810, which allowed for pretrial mental health diversion. Those six counties account for 65 percent of all inmates
imprisoned between 2016 and 2018, according to statistics compiled by the California
Department of Corrections and Rehabilitation. They are also among the state’s 10
largest counties in terms of population. Those two laws were selected among the
dozens of laws and voter-approved initiatives because they were controversial when
passed, addressed longstanding critiques by reform advocates that the system is overly
punitive and does not address the mental health needs of defendants. Also, unlike more
sweeping reform measures like public safety realignment, both laws allow prosecutors
to weigh in and either support or oppose the request from a defendant for the benefits
under the new laws and provides a rough gauge on how the reforms are playing out in
county courthouses. California’s new felony murder law, SB 1437, changed previous
state law so that someone who was an accomplice to a murder — and not the actual
killer — could not be sentenced to 25 years to life in prison. Crucially, the new law is
retroactive, meaning many hundreds of inmates who were not actual killers and are
serving life sentences could be eligible for a reduced sentence. Inmates have to file a
petition with local courts, and if they are eligible they must then get a review and a
hearing in front of a judge. The state’s mental health diversion law, or AB 1810, allows
people charged with crimes other than murder, sex offenses and child abuse, to ask for
diversion to a mental health treatment plan before the case goes to trial, as long as they
can convince a judge that their mental illness was a motivating factor in committing the
crime. The diversion suspends action in the case and can last up to two years. If the
defendant successfully completes treatment, the charges are dismissed and their
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records sealed. A judge has to approve diversion and it can be canceled at any time if
the person does not comply with the treatment program. Prosecutors have dug
in hardest against the felony murder law, the data collected by the newspaper shows.
Almost since its inception on Jan. 1 this year, district attorney’s offices across the
state have challenged the law as unconstitutional. The attacks contend the law is an
unauthorized amendment to two previously voter-approved initiatives, Proposition 7
and Proposition 115, and longstanding state law prohibits the legislature from amending
voter-approved laws. Rulings from trial judges in various counties have been split with
some ruling the law is constitutional and others not.On Tuesday the 4th District Court of
Appeal in San Diego ruled that the law is constitutional, rejecting challenges from
prosecutors in three cases from San Diego and Riverside counties. They are the first
appellate rulings in the state to make a determination on the law, though the legal
tussle may not be over — prosecutors may still ask the state Supreme Court to review
the decision. In San Diego County, the District Attorney’s Office said it had received
198 petitions seeking sentence reductions under the law. It opposed 60, all from
defendants the office concluded were not eligible for a new sentence under the
parameters of the new law. Since the appeal was filed in May, all cases are on hold in
San Diego Superior Court until the legal issues are settled. Opposition is nearly
universal in other counties. In Riverside, 276 resentencing petitions were filed since the
new law was passed and the district attorney opposed every one. Similarly, in San
Bernardino 255 petitions for reduced sentences have been filed, and all were opposed.
Sacramento prosecutors opposed 150 of 330 total petitions. Los Angeles County, the
state’s largest, received 1,647 petitions under the new felony murder law. A spokesman
for District Attorney Jackie Lacey said the office could not provide an “accurate count”
of how many it opposed. Judges there have granted 10 petitions, according to the
spokesman. That is more than any of the other counties, where the data from
prosecutors showed judges had not granted a single resentencing yet. (A spokeswoman
for the Orange County district attorney said the office does not track these
requests).The legal battle has largely halted action on demands from inmates for
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resentencing hearings in county courts. It has also given reason for district attorneys to
oppose those bids. “There are significant concerns whether the statute itself is
constitutional or validly enacted,” Shelly Orio, a spokeswoman for the Sacramento
District Attorney’s Office said in an email. “Based on those concerns, our office has filed
a constitutional challenge to the statute.” Michele Hanisee, the leader of the Association
of Deputy District Attorneys in Los Angeles and an outspoken critic of the law, said that
the numbers can be misleading because many inmates who are not eligible are
applying, clogging up the system. Cases can also be years old requiring a hunt for
records, transcripts and other documents, which takes time. Still she said prosecutors
disagree with the law. “Our office is opposing them and prosecutors around the state
are opposing them,” she said. “Felony murder did not go away. If someone is eligible
that does not mean their conviction is going to be vacated. Prosecutors don’t want
people rightly convicted of murder getting released.” When AB 1810 was passed in July
2018, supporters said the law addressed a surge in recent years of people who had been
declared incompetent to stand trial being sent to the state mental health hospital,
straining its resources. Instead it offered defendants a chance to get treated locally
under court supervision, but without having to go through a criminal proceeding.
Prosecutors and judges objected to the mental health law immediately, complaining it
went through no hearing and was buried deep in large bill covering myriad subjects. The
law was soon amended so people charged with serious crimes like murder and sexual
abuse were not eligible, a move that addressed one of the objections from law
enforcement. Data show that prosecutors are opposing defendants seeking to be
moved into treatment under the diversion law less frequently than they are opposing
those seeking resentencing under the felony murder law. In San Diego, prosecutors have
opposed 26 of 94 requests for diversion. Judges have granted 30. In Los
Angeles, 342 requests for diversion have been filed, with prosecutors opposing 147, and
judges granting 145. In Sacramento, prosecutors opposed 89 of 140 diversion requests,
judges granted 57. And in Orange County prosecutors opposed 21 of 118 requests, with
judges granting 35 total. San Bernardino and Riverside could not say how many
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diversion requests had been filed by defendants or how many they opposed. Mental
health advocates who supported the law said it is still a work in progress and were
hesitant to draw broad conclusions about how it is playing out in court. The law is
potentially far broader than existing diversion programs that often require someone to
enter a plea before getting help, said Anne Hadreas, a staff lawyer for Disability Rights
California. “There was diversion before but for a smaller group,” she said. “Now I think
there is some fear that they want to make sure we are doing this in a way that is safe
and appropriate.” While the legal conflicts continue, state prosecutors are gearing up
for an election battle in 2020. A measure that would reverse some reforms adopted by
voters in Proposition 57 will be on the ballot. It would expand the list of violent crimes
that would make inmates ineligible for early parole, require DNA collection for some
drug and theft offenses, and tighten parole reviews. Hanisee said the measure would
correct “unintended consequences” of the propositions, but opponents see it as an
effort to roll back nearly a decade of reform of the state’s justice system.
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A/2: Regulation is risky
De-link: Regulation is good for the economy
Warrant: Regulations set important standards
How Regulations Benefit the Economy. (2021). World Economic Forum.
https://www.weforum.org/agenda/2018/07/three-cheers-for-regulation
“Many regulations play this standard-setting role. Contrary to the simplistic view that
regulation is inevitably bad for business, there are in fact three important channels
through which regulation can benefit an economy. One is the market-creating and
market-growing role illustrated by the GSM standard. When there are competing
technological approaches, such as the famous contest in the 1970s between the
Betamax and VHS standards for videotape, consumers are better served if these
contests between similar standards are settled promptly and decisively, to preclude
the risk of spending money on a losing technology. When the standard is set by
regulation in a large market like the EU, the United States, or China, economies of scale
kick in quickly. The virtuous circle of falling prices, quality improvements, and growing
demand is thereby established.”
Warrant: Regulation enhances competition
How Regulations Benefit the Economy. (2021). World Economic Forum.
https://www.weforum.org/agenda/2018/07/three-cheers-for-regulation
“Regulation can also benefit an economy by enabling competition. This seems
counter-intuitive, and indeed some forms of regulation serve to enable rent-seeking
behavior. Businesses in oligopolistic sectors often complain about the burden of
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compliance; but they clearly rely on regulation as a barrier to market entry by new
competitors. The cost of their regulatory burden is a fee they pay for market power.”
Answer: Crypto Regulation is Important
Warrant: Regulation will increase trust
Gebbing, H. (2021, August 16). Regulation will boost crypto’s legitimacy. Tech Crunch.
https://techcrunch.com/2021/08/16/regulating-crypto-is-essential-to-ensuringits-global-legitimacy/
“To address the challenges of the fast-evolving blockchain ecosystem, the European
Union has begun to introduce more stringent financial regulations that further bolster
the regulatory system in order to improve licensing models. Many member states now
regulate crypto assets individually, and Germany is leading the way in being the first to
regulate cryptocurrencies. These individual regulations clearly prescribe the pathway
for crypto companies, outlining the requirements for obtaining and maintaining a
financial license from the regulator. Compliance naturally boosts investor confidence
and protection.”
Warrant: Regulations will end crypto’s “outlaw days”
Gebbing, H. (2021, August 16). Regulation will boost crypto’s legitimacy. Tech Crunch.
https://techcrunch.com/2021/08/16/regulating-crypto-is-essential-to-ensuringits-global-legitimacy/
“Activity can already be monitored through a collective database of users known to
abide by international standards. This knowledge of approved users and vendors
allows the industry to spot misconduct or malfeasance far sooner than usual, singling
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out and restricting illegitimate users. By means of a well-thought-through tweaking of
the suggested regulations, a verified network can collectively be built to ensure trust
and properly leverage blockchain’s potential, while barring those bad actors intent on
corrupting or manipulating the system. That would be a huge step forward in
prosecuting international financial crimes and ensuring crypto’s legitimacy globally.
Crypto’s outlaw days are over, but it’s gained an unprecedented level of legitimacy
that can only be preserved and bolstered by abiding with regulatory oversight.”
Analysis: This response shows that even if some regulations are bad, there are unique
advantages to regulating the crpyto sector. Emphasize the value of specific analysis over
generalities.
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A/2: Regulation is politically toxic
De-link: Crypto regulations are popular
Warrant: Regulations are bipartisan
Davidson, L. (2021). Crypto Rules in Senate Bill Eyed for Bipartisan Rewrite. Bloomberg.
https://www.bloomberg.com/tosv2.html?vid=&uuid=7f991893-28b0-11ec-a34d6a4953465353&url=L25ld3MvYXJ0aWNsZXMvMjAyMS0wOC0wMy9jcnlwdG8tcn
VsZXMtaW4taW5mcmFzdHJ1Y3R1cmUtYmlsbC1leWVkLWZvci1iaXBhcnRpc2FuLX
Jld3JpdGU=
“Senators Ron Wyden and Pat Toomey are drafting a proposal to overhaul a
cryptocurrency provision in the $550 billion bipartisan infrastructure bill that traders
and investors have criticized as being overly broad and impractical. The bipartisan duo’s
more-targeted language would replace what’s in the bill the Senate is now debating -should their amendment get 60 votes on the Senate floor. It could also cause new
problems for the legislation, which was the product of several weeks of intense
negotiations between the White House and senators.”
Warrant: The issue has broad support
Davidson, L. (2021). Crypto Rules in Senate Bill Eyed for Bipartisan Rewrite. Bloomberg.
https://www.bloomberg.com/tosv2.html?vid=&uuid=7f991893-28b0-11ec-a34d6a4953465353&url=L25ld3MvYXJ0aWNsZXMvMjAyMS0wOC0wMy9jcnlwdG8tcn
VsZXMtaW4taW5mcmFzdHJ1Y3R1cmUtYmlsbC1leWVkLWZvci1iaXBhcnRpc2FuLX
Jld3JpdGU=
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“We’ve been trying to make sure the definitions reflect what really goes on in the digital
asset world, and we didn’t think the previous amendment did that, and so this effort is
to make sure that we’re really focused on the people who have the information,”
Senator Cynthia Lummis, a Wyoming Republican who focuses on crypto issues, said.
Regulating virtual currencies has become an area of bipartisan concern as the value
has exploded in recent years. Its use has also been tied to tax evasion, money
laundering and other illicit activities. Wyden said he is talking with Republicans who
want to be involved, including Ohio Senator Rob Portman, who wrote the current
language in the bill. Toomey said the talks are “constructive.”.”
Answer: Congress is already moving towards regulation
Warrant: A bill is headed for a vote
De, N. (2021, April 27). Congress Takes One Step Closer to Regulatory Clarity - CoinDesk.
Coindesk. https://www.coindesk.com/policy/2021/04/27/state-of-cryptocongress-takes-one-step-closer-to-regulatory-clarity/
“The U.S. House of Representatives passed H.R. 1602, the “Eliminate Barriers to
Innovation Act of 2021,” last week, sending it to the Senate, which referred it to the
Senate Banking Committee. If passed and signed into law, the bipartisan bill would
commission a working group to evaluate how the U.S. currently treats digital assets.
This might be the first major crypto bill to get anywhere in Congress. What’s more, it’s
one that, if passed, would have a direct impact on how the U.S. treats digital assets.
This could finally provide companies in this industry with some much-requested
regulatory clarity. The fact the bill has support from both parties is another mark in its
favor. Of course, if regulatory agencies don't act until this bill is implemented, it'll be
quite some time before any actual clarity is adopted.”
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Warrant: This bill is one of many
De, N. (2021, April 27). Congress Takes One Step Closer to Regulatory Clarity - CoinDesk.
Coindesk. https://www.coindesk.com/policy/2021/04/27/state-of-cryptocongress-takes-one-step-closer-to-regulatory-clarity/
“The entire House of Representatives passed the “Eliminate Barriers to Innovation
Act,” introduced by Reps. Patrick McHenry (R-N.C.) and Stephen Lynch (D-Mass.) in
March, making it the first major crypto-specific legislation to get through one of the
bodies of Congress. A number of other bills have also been introduced to define how
cryptocurrencies can or should be treated under U.S. law, but few have made any
progress. “It’s the first bill to address regulatory clarity for digital assets and digital asset
marketplaces to pass the house, and in a bipartisan fashion no less,” said Amy Davine
Kim, chief policy officer at the Chamber of Digital Commerce.
Representatives for McHenry and Lynch did not respond to requests for comment.”
Analysis: This response shows that even if there are some issues in the government over crypto
regulation, these are acceptable costs and legislation can move forward regardless.
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A/2: Crypto is too heterogenous
De-link: Competition increases with regulation
Warrant: Regulations set important standards
How Regulations Benefit the Economy. (2021). World Economic Forum.
https://www.weforum.org/agenda/2018/07/three-cheers-for-regulation
“Many regulations play this standard-setting role. Contrary to the simplistic view that
regulation is inevitably bad for business, there are in fact three important channels
through which regulation can benefit an economy. One is the market-creating and
market-growing role illustrated by the GSM standard. When there are competing
technological approaches, such as the famous contest in the 1970s between the
Betamax and VHS standards for videotape, consumers are better served if these
contests between similar standards are settled promptly and decisively, to preclude
the risk of spending money on a losing technology. When the standard is set by
regulation in a large market like the EU, the United States, or China, economies of scale
kick in quickly. The virtuous circle of falling prices, quality improvements, and growing
demand is thereby established.”
Warrant: Regulation enhances competition
How Regulations Benefit the Economy. (2021). World Economic Forum.
https://www.weforum.org/agenda/2018/07/three-cheers-for-regulation
“Regulation can also benefit an economy by enabling competition. This seems
counter-intuitive, and indeed some forms of regulation serve to enable rent-seeking
behavior. Businesses in oligopolistic sectors often complain about the burden of
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compliance; but they clearly rely on regulation as a barrier to market entry by new
competitors. The cost of their regulatory burden is a fee they pay for market power.”
Answer: Bans are unrealistic
Warrant: There is no indication that banning crypto would reduce cyberthreats
Smith, S. S. (2021, July 27). Calls To Ban Crypto Make Headlines, But They Ignore Reality.
Forbes. https://www.forbes.com/sites/seansteinsmith/2021/07/26/calls-to-bancrypto-make-headlines-but-they-ignore-reality/?sh=66330da42508
“Cryptocurrencies have long been viewed, by some, as convenient things to blame for
cyberattacks, ransomware, and other digital criminal activity. The issue at hand,
however, is that even though ransomware payments made in bitcoin or other crypto
certainly make for splashy headlines, focusing only on these ignores two facts. Firstly,
cybercrime and cybersecurity related issues existed long before bitcoin and other
cryptoassets burst into the financial landscape. Criminals are adept at finding tools to
enable criminal activity; there is no indication that banning cryptoassets would reduce
cyberthreats.”
Warrant: Regulation can solve crypto issues
Smith, S. S. (2021, July 27). Calls To Ban Crypto Make Headlines, But They Ignore Reality.
Forbes. https://www.forbes.com/sites/seansteinsmith/2021/07/26/calls-to-bancrypto-make-headlines-but-they-ignore-reality/?sh=66330da42508
“Secondly, many of those same splashy crypto headlines ignore the fact that there
have also been several high profile recoveries of funds by law enforcement agencies.
The JBS bitcoin ransom recovery by the FBI was undoubtedly the highest profile
instance of this kind, but law enforcement agencies across the world have successfully
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been cracking down on criminal enterprises seeking to leverage blockchain and
cryptoassets. Some purists might decry the increased regulatory and law enforcement
action, but reducing the criminal element in any sector should be viewed in a positive
light.”
Analysis: This response shows that crypto need not be banned to achieve beneficial social
effects. Why use a heavy-handed ban with potentially negative secondary effects if less invasive
measures will do?
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A/2: Crpyto should be outright banned, not regulated
De-link: Banning crypto is a bad idea
Warrant: Governments should be evenhanded
Andrews, D. (2021, May 27). Banning Bitcoin is a bad idea. Atlantic Council.
https://www.atlanticcouncil.org/blogs/new-atlanticist/banning-bitcoin-is-a-badidea/
“First is the overarching principle of technology neutrality—that we should develop
policies and laws that apply evenhandedly across technologies and time. For instance,
if we say we do not like Bitcoin because it can be used by bad actors, would that
position also apply neutrally to other financial technologies and instruments? The
bad-actor scenario could also occur with a duffle bag filled with $100 bills. The US
Treasury Department has printed about twelve billion $100 bills, 80 percent of which
are in circulation outside the country. Additionally, would a Bitcoin ban apply equally to
other digital assets that cost more than $30,000 (the current value of Bitcoin)—or
$10,000 or even $1?”
Warrant: A ban could hurt many Americans
Andrews, D. (2021, May 27). Banning Bitcoin is a bad idea. Atlantic Council.
https://www.atlanticcouncil.org/blogs/new-atlanticist/banning-bitcoin-is-a-badidea/
“Second, we have to think through what a firm ban would actually mean for an asset
that an estimated forty-six million Americans now own. Would the plan be to
prosecute anyone who does not hand over their Bitcoin and threaten them with jail
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time? Criminalizing 14 percent of the US population for mere possession of encryption
keys would pose a form of mass incarceration that is, among other things, antithetical
to the current political consensus on criminal-justice reform. How many thousands of
judicial proceedings would the confiscation of all those Bitcoin require? Would the
federal government plan to reimburse citizens for the billions in dollars in property it
confiscates? (By way of comparison, in the 1930s the US government ordered
restrictions on certain uses of gold, which were the subject of intense litigation and
were narrowly upheld by the Supreme Court. Notably, the right to own gold was
restored in the 1970s.)”
Answer: Bans are unrealistic
Warrant: There is no indication that banning crypto would reduce cyberthreats
Smith, S. S. (2021, July 27). Calls To Ban Crypto Make Headlines, But They Ignore Reality.
Forbes. https://www.forbes.com/sites/seansteinsmith/2021/07/26/calls-to-bancrypto-make-headlines-but-they-ignore-reality/?sh=66330da42508
“Cryptocurrencies have long been viewed, by some, as convenient things to blame for
cyberattacks, ransomware, and other digital criminal activity. The issue at hand,
however, is that even though ransomware payments made in bitcoin or other crypto
certainly make for splashy headlines, focusing only on these ignores two facts. Firstly,
cybercrime and cybersecurity related issues existed long before bitcoin and other
cryptoassets burst into the financial landscape. Criminals are adept at finding tools to
enable criminal activity; there is no indication that banning cryptoassets would reduce
cyberthreats.”
Warrant: Regulation can solve crypto issues
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Smith, S. S. (2021, July 27). Calls To Ban Crypto Make Headlines, But They Ignore Reality.
Forbes. https://www.forbes.com/sites/seansteinsmith/2021/07/26/calls-to-bancrypto-make-headlines-but-they-ignore-reality/?sh=66330da42508
“Secondly, many of those same splashy crypto headlines ignore the fact that there
have also been several high profile recoveries of funds by law enforcement agencies.
The JBS bitcoin ransom recovery by the FBI was undoubtedly the highest profile
instance of this kind, but law enforcement agencies across the world have successfully
been cracking down on criminal enterprises seeking to leverage blockchain and
cryptoassets. Some purists might decry the increased regulatory and law enforcement
action, but reducing the criminal element in any sector should be viewed in a positive
light.”
Analysis: This response shows that crypto need not be banned to achieve beneficial social
effects. Why use a heavy-handed ban with potentially negative secondary effects if less invasive
measures will do?
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A/2: Regulation will be ineffective
De-link: Regulation can work
Warrant: Regulation never ends up hurting crypto
Why Regulation Won’t Harm Cryptocurrencies. (2021). Knowledge@Wharton.
https://knowledge.wharton.upenn.edu/article/why-regulation-wont-harmcryptocurrencies/
“Feinstein and Werbach put those concerns to the test and examined if price declines
follow cryptocurrency regulation in a country. “The answer there is, ‘Almost always
not,’” said Feinstein. That finding was the result of an exhaustive study by Feinstein
and Werbach of trading activity at several exchanges worldwide following key
cryptocurrency regulatory announcements. Their study found “almost entirely null
results,” they wrote in an article published April 25 in the Journal of Financial
Regulation. “From the creation of bespoke licensing regimes to targeted anti-money
laundering and anti-fraud enforcement actions, as well as many other categories of
government activities, we found no systemic evidence that regulatory measures cause
traders to flee, or enter, the affected jurisdictions.” Their findings “at last provide an
empirical basis” for regulation of cryptocurrency trading, they added.”
Warrant: Laisse-faire regulation is not the answer
Why Regulation Won’t Harm Cryptocurrencies. (2021). Knowledge@Wharton.
https://knowledge.wharton.upenn.edu/article/why-regulation-wont-harmcryptocurrencies/
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““Crypto enthusiasts assert that limited regulation encourages trading on domestic
exchanges and thus attracts development activity around a promising frontier
technology, while unfavorable regulations will cause trading to move offshore,”
Feinstein and Werbach wrote in a recent opinion piece in The New York Times. “But that
wasn’t the case in multiple countries, including the U.S., that are home to large and
active cryptocurrency exchanges. Despite concern from some in finance that strong
regulations would dampen enthusiasm for crypto or push trading to more laissez-faire
countries, we found few hints of price movement around regulatory events and no
evidence of capital flight.”"
Turn: Regulation could be good for crypto
Warrant: Regulation would increase confidence
Lisa Ventura. “Five ways faith can make a difference in the world” World Economic
Forum. 2014. https://www.weforum.org/agenda/2014/07/five-ways-faithmakes-a-difference/
“Securities and Exchange Commission, told the Senate Banking Committee that the SEC
is working overtime to create a set of rules for crypto markets to protect investors,
among other things. In response, both the crypto community and its critics have shared
their own thoughts. Among those speaking up is billionaire investor Mark Cuban.
“Personally, I think regulation built around existing fraud laws is not a bad thing,”
Cuban tweeted in a thread on Thursday. “It will require Proof of Authorship and
identity, but it won’t hurt innovation, nor slow anything down.” Instead, regulation
will “open the door for more people to confidently use ‘crypto,’” Cuban tweeted.”
Warrant: On balance, regulation would make crypto more transparent
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Lisa Ventura. “Five ways faith can make a difference in the world” World Economic
Forum. 2014. https://www.weforum.org/agenda/2014/07/five-ways-faithmakes-a-difference/
“Cuban acknowledged that a form of proof of authorship would remove the
anonymity some prefer to maintain in the crypto community, but ultimately, he thinks
the good of mandating such a thing would outweigh the bad. “If you require Proof of
Authorship for Smart Contracts ... the feds and [potential fraud] victims will have a
person/entity to sue or indict,” he said. “Probably at the cost of anonymous innovators,
but that’s the price that will be paid.” (Smart contracts are collections of code that carry
out a set of instructions on the blockchain.) Cuban also predicted which areas he thinks
will be increasingly regulated, according to his current understanding of the crypto
space.”
Analysis: This response shows that regulation would actually be an affirmative good. Instead of
being lackluster the potential for upside is enormous and we should air on the side of
regulation to capture these benefits.
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A/2: Unjust Taxation
Answer: The IRS needs to crack down on cryptocurrency
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“The IRS has issued guidance stating that virtual currencies are treated as property (as
opposed to currency) for tax purposes, meaning users owe taxes on any realized gains
whenever they dispose of virtual currency, including when they use it to purchase
goods and services.82 However, there is a lack of clarity surrounding whether and to
what degree people are appropriately declaring gains from cryptocurrency on their tax
returns. By November 2016, the IRS had come to believe that cryptocurrency gains were
being underreported, finding that between 2013 and 2015 only 800 to 900 tax returns
declared such gains. 83 At the time, cryptocurrency exchanges were generally not
reporting transaction information to the IRS, so the IRS initiated court proceedings
against Coinbase—the largest cryptocurrency exchange operating in the United States—
seeking to compel it to turn over customer information so that the IRS could determine
the amounts taxpayers owed. 84 Coinbase resisted turning over the information until
the court eventually ruled against it in November 2017.85 Coinbase notified 13,000
customers that it was turning over information in their accounts to comply with the
order. In July 2019, the IRS sent letters to 10,000 taxpayers with cryptocurrency
transactions alerting them that they potentially had not met their reporting
requirements (although the IRS did not explicitly link the letters to the Coinbase case).
The prevalence of using cryptocurrency to avoid taxes is uncertain at this time. The
language in certain variations of the letters the IRS sent indicates the IRS did not think
these recipients’ failure to pay was intentional.87 Even in cases where the failure might
have been willful, it is not clear if money laundering was the primary motivation. Rather,
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investors may have been seeking to profit from cryptocurrency, and then not paying
taxes on the gains after the fact, rather than primarily seeking to hide assets from tax
authorities. Indeed, cryptocurrencies’ poor performance as a store of value may make
them a poor instrument for this purpose at this time. In addition, prominent U.S.
cryptocurrency exchanges now generally submit customer and transaction data on
certain customers to the IRS. Nevertheless, the difficulty the IRS experienced with the
largest and most well-known cryptocurrency exchange may suggest that individuals
who seek to evade taxes might look to cryptocurrency as a possible avenue.”
Warrant: IRS intervention in regulating crypto assets has been successful historically
Saunders, Laura. “The IRS Is Coming for Crypto Investors Who Haven't Paid Their
Taxes.” The Wall Street Journal, Dow Jones & Company, 14 May 2021,
https://www.wsj.com/articles/bitcoin-irs-comes-for-crypto-investors-whohavent-paid-their-taxes-11620937095.
“The new summonses aren’t the first of their kind. In 2016, the IRS received approval for
a similar summons of the crypto firm Coinbase Global and obtained information for
about 13,000 customers. The agency sent letters urging many of them to make sure
their crypto taxes were paid, as the IRS might soon take a hard look. To justify the new
searches of Kraken and Circle, the IRS divulged some results of the Coinbase campaign.
In court filings, the agency said it has received more than 1,000 amended tax returns
and collected $13 million from crypto holders with more than $20,000 of transactions,
plus another $12 million from other crypto notices, and audits are ongoing.”
Warrant: Investors avoid capital gains taxes on cryptocurrency by selling more recent
investments (lot identification)
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Saunders, Laura. “The IRS Is Coming for Crypto Investors Who Haven't Paid Their
Taxes.” The Wall Street Journal, Dow Jones & Company, 14 May 2021,
https://www.wsj.com/articles/bitcoin-irs-comes-for-crypto-investors-whohavent-paid-their-taxes-11620937095.
“Investors who are selling some but not all of a crypto holding bought at different
prices can often minimize taxes, sometimes a great deal, by specifying which lot they
are selling. For example, say that someone sold bitcoins at $22,000 each in December
2020 and had coins bought in 2016 for $600 and 2017 for $16,000. Selling the 2016
coins would mean a taxable gain of $21,400 each, while selling the 2017 coins would
mean a gain of $6,000 each—a big difference. Keeping good records of crypto lots can
be hard because platforms may not be set up for this, says Jordan Bass, a CPA and tax
attorney with Taxing Cryptocurrency. He often recommends transferring crypto not
slated for sale to “cold wallets” and then moving it to “hot wallets” shortly before a sale,
to clarify what’s being sold.”
Warrant: Investors offset capital gains by taking advantage of the wash sale rule
Saunders, Laura. “The IRS Is Coming for Crypto Investors Who Haven't Paid Their
Taxes.” The Wall Street Journal, Dow Jones & Company, 14 May 2021,
https://www.wsj.com/articles/bitcoin-irs-comes-for-crypto-investors-whohavent-paid-their-taxes-11620937095.
“Because cryptocurrencies aren’t technically securities, they aren’t subject to the socalled wash-sale rules. These rules reduce the benefit of capital losses if an investor
purchases the security 30 days before or after selling it at a loss. Mr. Bass often advises
clients to harvest capital losses on crypto to offset current or future capital gains. If the
investor still is bullish on the holding, she can repurchase it right away.”
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A/2: Regulation will spur more dangerous alternatives
Answer: Regulation is needed and can snuff out less-trackable coins.
Warrant: Cryptocurrencies can be used as a means to fund illicit activity
Siripurapu, Anshu. “Cryptocurrencies, Digital Dollars, and the Future of Money.” Council
on Foreign Relations, Council on Foreign Relations, 24 Sept. 2021,
https://www.cfr.org/backgrounder/cryptocurrencies-digital-dollars-and-futuremoney.
“Illicit activities. In recent years, cybercriminals have increasingly carried out
ransomware attacks, by which they infiltrate and shut down computer networks and
then demand payment to restore them, often in cryptocurrency. Drug cartels and
money launderers are also “increasingly incorporating virtual currency” into their
activities, according to the U.S. Drug Enforcement Agency’s (DEA) most recent annual
assessment. U.S. and European authorities have shut down a number of so-called
darknet markets—websites where anonymous individuals can use cryptocurrency to
buy and sell illegal goods and services, primarily narcotics. Terrorism and sanctions
evasion. The primacy of the U.S. dollar has provided the United States unrivaled power
to impose crippling economic sanctions. However, sanctioned states including Iran and
North Korea are increasingly using cryptocurrency to evade U.S. penalties. Meanwhile,
terrorist groups such as the self-proclaimed Islamic State, al-Qaeda, and the military
wing of the Palestinian organization Hamas also traffic in crypto”
Warrant: US Regulation helps with tracking cryptocurrency
Siripurapu, Anshu. “Cryptocurrencies, Digital Dollars, and the Future of Money.” Council
on Foreign Relations, Council on Foreign Relations, 24 Sept. 2021,
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https://www.cfr.org/backgrounder/cryptocurrencies-digital-dollars-and-futuremoney.
“To limit illicit activities, authorities have targeted the exchanges that allow users to
convert cryptocurrencies to U.S. dollars and other national currencies. Under pressure
from regulators, major exchanges including Coinbase, Binance, and Gemini adhere to
“know your customer” and other anti–money laundering requirements. Law
enforcement and intelligence agencies, meanwhile, have learned to leverage the
traceability of most cryptocurrencies by using blockchains to analyze and track
criminal activity. For example, some of the ransom paid to the Colonial Pipeline hackers
was later recovered by the FBI. In September 2021, the Treasury Department
announced a crackdown on the use of cryptocurrencies in ransomware attacks, issuing
its first sanctions on a crypto exchange.”
Warrant: Increased or continued regulation of crypto is necessary because of the quick and
anonymous nature of transactions
Siripurapu, Anshu. “Cryptocurrencies, Digital Dollars, and the Future of Money.” Council
on Foreign Relations, Council on Foreign Relations, 24 Sept. 2021,
https://www.cfr.org/backgrounder/cryptocurrencies-digital-dollars-and-futuremoney.
“Once dismissed as a fringe interest of tech evangelists, cryptocurrencies—particularly
Bitcoin—have skyrocketed in value in recent years. In 2021, the price of a Bitcoin surged
to more than $60,000 for the first time. Different currencies have different appeals, but
the popularity of cryptocurrencies largely stems from their decentralized nature: They
can be transferred relatively quickly and anonymously, even across borders, without
the need for a bank that could block the transaction or charge a fee. Dissidents in
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authoritarian countries have raised funds in Bitcoin to circumvent state controls, for
example. Some experts say that digital assets are primarily tools for investment.”
Warrant: Cryptocurrency administrators and exchanges are not fully compliant on current
regulations in line with the Financial Crimes Enforcement Network, which devotes itself to
anti-money laundering
Massad, Timothy G. It's Time To Strengthen the Regulation of Cypto-Assets. Brookings
Institution, Mar. 2019, https://www.brookings.edu/wpcontent/uploads/2019/03/Timothy-Massad-Its-Time-to-Strengthen-theRegulation-of-Crypto-Assets-2.pdf.
“Guidance issued by the Financial Crimes Enforcement Network (FinCEN) in 2013 made
it clear that cryptocurrency “administrators” and “exchanges” must register as Money
Service Businesses and comply with reporting and record keeping requirements.41 But
the absence of a regulatory framework for the intermediaries that would require record
keeping, reporting and transparency makes the job of enforcing those regulations
difficult. As of October 2018, out of the 100 top exchanges listed on Coinmarket.cap, 13
had reportedly registered with FINCEN. The director of FinCEN, Kenneth Blanco,
expressed his surprise at how many exchanges only began compliance activities because
they received notice of an examination. “Compliance does not begin because you may
get caught, or because you are about to be discovered,” Blanco declared. “That is not a
culture that protects our national security, our country, and our families. It is not a
culture we will tolerate. A recent report by the Office of the New York Attorney General
found that the stated procedures of platforms related to onboarding of customers,
which is critical to complying with anti-money laundering (AML) and Know Your
Customer (KYC) regulations, varied widely, with some being very weak. Moreover, the
report simply surveys what the platforms claim to do; it did not investigate what they
actually do. Actual AML and KYC compliance may be even weaker.”
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A/2: Worsens vulnerabilities
Answer: Hacking is dangerous in the status quo; action must be taken to stop hackers.
Warrant: Hacking and stealing of cryptocurrency could be done relatively easily and is
trending upwards
“The Chainalysis 2021 Crypto Crime Report.” Chainalysis, 16 Feb. 2021,
https://go.chainalysis.com/rs/503-FAP-074/images/Chainalysis-Crypto-Crime2021.pdf.
“In 2020, over $520 million worth of cryptocurrency was stolen from services and
individuals through hacks and non-technical attacks like social engineering or phishing
efforts. That represents an uptick from 2019 following a huge decline from the
amount stolen in 2018, most of which could be attributed to the $534 million Coincheck
hack. More than half of the amount stolen in 2020 was from the hack of the exchange
KuCoin, which we can now publicly attribute to Lazarus Group, a notorious North Koreaaligned cybercriminal syndicate responsible for hacking numerous cryptocurrency
exchanges over the last few years. The hackers managed to take $275 million worth of
cryptocurrency from KuCoin, making it the biggest cryptocurrency theft of the year and
third-largest of all time, though KuCoin claims to have recovered most of the funds.
Later in this section, we’ll look more at this hack and share details on how Lazarus
Group’s money laundering strategy changed in 2020.”
Warrant: Open-source code, which cryptocurrencies use to promote ease of access and
transfer, can be easily compromised and highlights the necessity of regulation and law
enforcement
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“The Chainalysis 2021 Crypto Crime Report.” Chainalysis, 16 Feb. 2021,
https://go.chainalysis.com/rs/503-FAP-074/images/Chainalysis-Crypto-Crime2021.pdf.
“These attacks on bZx worked because the platform’s code contained no failsafes to
account for large price jumps on other DeFi platforms, which may have caught the
cybercriminals pumping wrapped Bitcoin’s price on Uniswap. shows the issue has now
been fixed. But this underlines another reason DeFi platforms are vulnerable to attack:
their use of open-source code. DeFi platforms move users’ funds based solely on their
underlying code without human intervention, so users need to be able to audit that
code in order to trust the platform, making open source a necessity. However, that
means cybercriminals can also analyze the code for vulnerabilities and plot the perfect
attack, as it appears they did in the case of the bZx flash loan attacks. In fact, bZx was
hacked again later in the year to the tune of , all because a single misplaced line of code
allowed users to manipulate their own balances under certain circumstances, creating
new tokens for themselves at will. These attacks go to show how important it is for
DeFi platforms to implement the latest and greatest security measures. One provider
to watch here is , a company that helps DeFi platforms protect against price
manipulation attacks with decentralized price oracles. Decentralized price oracles
aggregate pricing data from more sources and deliver it to the DeFi platform on-chain
through a network of independent nodes, thereby making it harder for price
manipulators to target a single weak spot. However, even with such advancements,
regulators and law enforcement should look for ways to ensure the extremely
promising DeFi space remains safe for investors.”
Impact: Hacking threatens the stability of our financial system
Massad, Timothy G. It's Time To Strengthen the Regulation of Cypto-Assets. Brookings
Institution, Mar. 2019, https://www.brookings.edu/wp-
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content/uploads/2019/03/Timothy-Massad-Its-Time-to-Strengthen-theRegulation-of-Crypto-Assets-2.pdf.
“The risk of a cyber-attack on our core financial market infrastructure was my biggest
concern while chairing the CFTC. It could result in significant interruption of trading
and other services, loss of data and customer assets, and potentially threats to
financial stability. We took actions to require trading and clearing platforms to maintain
stronger cybersecurity protections. But it is a never-ending battle to keep defenses up
to date. The Office of Financial Research (OFR) concluded in its 2017 Financial Stability
Report that cryptocurrencies have increased the risk that cyber-attacks will take place.
That’s because perpetrators — be they criminals or rogue state actors — can move
and hold money pseudonymously and escape detection, and thereby succeed in
ransomware demands.29 The OFR Report lists cyber-attacks as the top threat to
financial stability, and notes that the risk is especially great in the financial sector
because it is so interconnected and heavily reliant on technology.”
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A/2: Cryptocurrencies are good for the environment
Answer: Cryptocurrencies are energy-intensive.
Siripurapu, Anshu. “Cryptocurrencies, Digital Dollars, and the Future of Money.” Council
on Foreign Relations, Council on Foreign Relations, 24 Sept. 2021,
https://www.cfr.org/backgrounder/cryptocurrencies-digital-dollars-and-futuremoney.
“Bitcoin mining is an enormously energy-intensive process: the network now
consumes more electricity than many countries. This has sparked fears about crypto’s
contributions to climate change. Cryptocurrency proponents say this problem can be
solved using renewable energy; El Salvador’s president has pledged to use volcanic
energy to mine Bitcoin, for example. Environmental concerns reportedly prompted
Ethereum’s move to a proof-of-stake model, which uses less energy.”
Warrant: Mining, the process that creates bitcoin (the first cryptocurrency), is heavily energy
intensive
Kolbert, Elizabeth. “Why Bitcoin Is Bad for the Environment.” The New Yorker, 22 Apr.
2021, https://www.newyorker.com/news/daily-comment/why-bitcoin-is-badfor-the-environment.
“Mining is the process by which bitcoin is both created and accounted for. Instead of
being cleared by, say, a bank, bitcoin transactions are recorded by a decentralized
network—a blockchain. Miners compete to register the latest “block” of transactions
by solving cryptographic puzzles. The first one to the solution is rewarded with freshly
minted bitcoin. Miners today receive 6.25 bitcoins per block, which, at current values,
are worth more than three hundred thousand dollars. It’s unclear exactly who dreamt
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up bitcoin, so no one knows what this person (or persons) was thinking when the mining
protocols were first established. But, as Ari Juels, a computer scientist at Cornell Tech,
recently explained to me, the arrangement seems to have been designed with equity in
mind. Anyone devoting a processor to the enterprise would have just as much stake in
the outcome as anyone else. As is so often the case, though, the ideal was soon
subverted. “What was quickly discovered is that specialized computing devices—socalled mining rigs—are much, much more effective at solving these puzzles,” Juels
said. “And, in addition, there are economies of scale in the operation of these mining
groups. So the process of mining, which was originally conducted by a loose
federation of presumably individual participants with ordinary computing devices, has
now become heavily consolidated.”
Warrant: Environmental advocacy organizations attest to the urgency for action to be taken
as more companies push towards beginning their own mining operations in the US
Kolbert, Elizabeth. “Why Bitcoin Is Bad for the Environment.” The New Yorker, 22 Apr.
2021, https://www.newyorker.com/news/daily-comment/why-bitcoin-is-badfor-the-environment.
“Whether this is, in fact, the case is debatable. What’s beyond debate—or should be, at
least—is that this is a matter that shouldn’t be left to a local planning board to decide.
There’s no way for New York, or the U.S. as a whole, to meet its emissions-reductions
goals if old generating stations, rather than being closed, are converted into bitcoinmining operations. Greenidge may become the first mining firm with a “wholly-owned
power plant,” but, unless the state or federal government steps in, it won’t be the
last: another cryptocurrency firm, Digihost International, has already applied to New
York State’s Public Service Commission for permission to purchase a natural-gasburning station near Buffalo. As representatives of Earthjustice and the Sierra Club
recently put it, in a letter to officials of New York’s Department of Environmental
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Conservation, “additional scrutiny . . . is essential to prevent the floodgates opening
for other retiring power plants.””
Warrant: The trend towards the “proof-of-stake” concept increases the concentration of
mining power, which threatens the entirety of cryptocurrencies (either there are massive
environmental harms or there is a centralized, worse version of cryptocurrencies)
Crapo, Mike. “Exploring the Cryptocurrency and Blockchain Ecosystem: United States
Committee on Banking, Housing, and Urban Affairs.” Hearings | United States
Committee on Banking, Housing, and Urban Affairs, 11 Oct. 2018,
https://www.banking.senate.gov/hearings/exploring-the-cryptocurrency-andblockchain-ecosystem.
”The environmental costs of the energy use of Bitcoin and other cryptocurrencies is so
vast that has been correctly and repeatedly compared to an environmental disaster.
No need to repeat how such energy mis-use and waste is massive—larger than the
energy use per year of a mid-sized advanced economy. Such an environmental disaster
has shamed even supporters of crypto who have become defensive given the
embarrassing evidence of such energy costs and pollution. But now zealot supporters of
crypto are pretending that this environmental disaster can be minimized or resolved
soon. Since using millions of computers to do useless cryptographic games to secure the
verification of crypto transactions is a useless waste of energy—as the same
transactions could be reported at near zero energy costs on an single Excel
spreadsheet—crypto zealots argue that such costs could be massively reduced if
crypto moves from energy-hogging PoW to less energy wasteful Proof of Stake. But as
we discussed above in detail, scalability of crypto transactions via PoS will be massively
concentrated in dangerous oligopolies—even more so than PoW—and therefore such
centralization of mining power will lead to most severe problems of security. So, there
is no free lunch here. Either crypto keeps on using energy-hogging and environmentaldisaster PoW or it will become an insecure, centralized, and dangerous system.”
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A/2: Centralizing cryptocurrency is dangerous
Answer: Creating bank-currencies would improve cryptocurrency in the long-term
Warrant: Cryptocurrencies could be used by central banks.
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“To date, governments (Venezuela excepted) generally have not been directly involved
in the creation of cryptocurrencies; one of the central goals in developing the
technology was to eliminate the need for government involvement in money creation
and payment systems. However, cryptocurrency’s decentralized nature is at the root of
certain risks and challenges related to its lack of widespread adoption by the public
and its use by criminals. These risks and challenges have led some observers to
suggest that perhaps central banks could use the technologies underlying
cryptocurrencies to issue their own central bank digital currencies (CBDCs) to realize
certain hoped-for efficiencies in the payment system in a way that would be “safe,
robust, and convenient.”
Context: There is intense debate in the crypto and banking community about the
implementation of a central bank digital currency
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
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“Central Bank Digital Currency (CBDC)—fiat currency issued by central banks in digital
form—has progressed in the past few years from a bold speculative concept to a
seeming inevitability. More than 80% of central bank respondents to a Bank for
International Settlements survey in 2019 reported engagement in CBDC projects [1].
One in ten of these banks, representing approximately one-fifth of the world’s
population, deemed it likely that they would offer CBDCs within the next three years.
The People’s Bank of China, whose plans are well in advance of that of other major
economic powers, has begun to pilot a digital yuan [2]. Hearings on CBDC have taken
place this year in the U.S. House Committee on Financial Services [3]. The European
Central Bank has initiated a project to explore CBDC development [4] while Sweden (an
E.U. but not Eurozone member), has begun testing a CBDC known as the e-krona”
Context: History has shown that the model for various currencies has been ineffective in the
past and required a centralized currency fix
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“Another challenge in an economy with multiple currencies—as would be the case in an
economy with a fiat currency and cryptocurrencies—is that the existence of multiple
currencies adds difficulty to buyers and sellers making exchanges; all buyers and sellers
must be aware of and continually monitor the value of different currencies relative to
each other. As an example, such a system existed in the United States for periods before
the Civil War when banks issued their own private currencies. The inefficiency and costs
of tracking the exchange rates and multiple prices in multiple currencies eventually led
to calls for and the establishment of a uniform currency.”
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Warrant: The implementation of an effective centralized bank digital currency can optimize
compliance with regulations and law enforcement
Allen, Sarah, et al. “Design Choices for Central Bank Digital Currency.” Brookings,
Brookings, 23 July 2020, https://www.brookings.edu/wpcontent/uploads/2020/07/Design-Choices-for-CBDC_Final-for-web.pdf.
“Ensuring compliance with anti-money laundering/combating financing of terrorism
(AML/CFT) regulations has been a major challenge for government authorities. The
elimination of physical cash could assist in these efforts, although the likely shifting of
illicit fund transfers to decentralized payment systems and intermediated through
anonymous, decentralized cryptocurrencies could vitiate this progress. This is one
reason why central banks might seriously consider issuing CBDCs so they can retain
control of or at least oversight over payment systems that could as easily be used for
illicit as for licit purposes.”
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A/2: Regulation will inspire political backlash
Argument: Crypto regulations are popular, will not be opposed by lobbying groups
Warrant: Regulations are bipartisan
Davidson, L. (2021). Crypto Rules in Senate Bill Eyed for Bipartisan Rewrite. Bloomberg.
https://www.bloomberg.com/tosv2.html?vid=&uuid=7f991893-28b0-11ec-a34d6a4953465353&url=L25ld3MvYXJ0aWNsZXMvMjAyMS0wOC0wMy9jcnlwdG8tcn
VsZXMtaW4taW5mcmFzdHJ1Y3R1cmUtYmlsbC1leWVkLWZvci1iaXBhcnRpc2FuLX
Jld3JpdGU=
“Senators Ron Wyden and Pat Toomey are drafting a proposal to overhaul a
cryptocurrency provision in the $550 billion bipartisan infrastructure bill that traders
and investors have criticized as being overly broad and impractical. The bipartisan duo’s
more-targeted language would replace what’s in the bill the Senate is now debating -should their amendment get 60 votes on the Senate floor. It could also cause new
problems for the legislation, which was the product of several weeks of intense
negotiations between the White House and senators.”
Warrant: The issue has broad support
Davidson, L. (2021). Crypto Rules in Senate Bill Eyed for Bipartisan Rewrite. Bloomberg.
https://www.bloomberg.com/tosv2.html?vid=&uuid=7f991893-28b0-11ec-a34d6a4953465353&url=L25ld3MvYXJ0aWNsZXMvMjAyMS0wOC0wMy9jcnlwdG8tcn
VsZXMtaW4taW5mcmFzdHJ1Y3R1cmUtYmlsbC1leWVkLWZvci1iaXBhcnRpc2FuLX
Jld3JpdGU=
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“We’ve been trying to make sure the definitions reflect what really goes on in the digital
asset world, and we didn’t think the previous amendment did that, and so this effort is
to make sure that we’re really focused on the people who have the information,”
Senator Cynthia Lummis, a Wyoming Republican who focuses on crypto issues, said.
Regulating virtual currencies has become an area of bipartisan concern as the value
has exploded in recent years. Its use has also been tied to tax evasion, money
laundering and other illicit activities. Wyden said he is talking with Republicans who
want to be involved, including Ohio Senator Rob Portman, who wrote the current
language in the bill. Toomey said the talks are “constructive.”.”
Answer: Congress is already moving towards regulation
Warrant: A bill is headed for a vote
De, N. (2021, April 27). Congress Takes One Step Closer to Regulatory Clarity - CoinDesk.
Coindesk. https://www.coindesk.com/policy/2021/04/27/state-of-cryptocongress-takes-one-step-closer-to-regulatory-clarity/
“The U.S. House of Representatives passed H.R. 1602, the “Eliminate Barriers to
Innovation Act of 2021,” last week, sending it to the Senate, which referred it to the
Senate Banking Committee. If passed and signed into law, the bipartisan bill would
commission a working group to evaluate how the U.S. currently treats digital assets.
This might be the first major crypto bill to get anywhere in Congress. What’s more, it’s
one that, if passed, would have a direct impact on how the U.S. treats digital assets.
This could finally provide companies in this industry with some much-requested
regulatory clarity. The fact the bill has support from both parties is another mark in its
favor. Of course, if regulatory agencies don't act until this bill is implemented, it'll be
quite some time before any actual clarity is adopted.”
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Warrant: This bill is one of many
De, N. (2021, April 27). Congress Takes One Step Closer to Regulatory Clarity - CoinDesk.
Coindesk. https://www.coindesk.com/policy/2021/04/27/state-of-cryptocongress-takes-one-step-closer-to-regulatory-clarity/
“The entire House of Representatives passed the “Eliminate Barriers to Innovation
Act,” introduced by Reps. Patrick McHenry (R-N.C.) and Stephen Lynch (D-Mass.) in
March, making it the first major crypto-specific legislation to get through one of the
bodies of Congress. A number of other bills have also been introduced to define how
cryptocurrencies can or should be treated under U.S. law, but few have made any
progress. “It’s the first bill to address regulatory clarity for digital assets and digital asset
marketplaces to pass the house, and in a bipartisan fashion no less,” said Amy Davine
Kim, chief policy officer at the Chamber of Digital Commerce.
Representatives for McHenry and Lynch did not respond to requests for comment.”
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CON: Politics
Argument: Regulation will call political backlash
Uniqueness: Climate Legislation coming now
Michael Smolens, San Diego Union-Tribune, 1-27-2021 ["Column: Push to combat
climate change may be heading toward a bipartisan future",
https://www.sandiegouniontribune.com/columnists/story/2021-01-27/columnbipartisan-climate-change-legislation-defies-divisions-in-d-c, 10-10-2021] Srikar
T. S.
Then last month, something unusual happened. At a time when political divisions had
become increasingly raw, Congress passed a bipartisan package of legislation to
combat climate change. More may be on the way. Rep. Scott Peters, D-San Diego, has
been in the thick of all of this. He introduced one of the key measures approved late last
year, played a leading role in others and is pursuing additional legislation this year from
his position on the House Energy and Commerce Committee. Peters, along with others,
took a leading role in legislation to encourage development of carbon-capture
technologies and a 15-year phase-out of hydrofluorocarbons (HFCs), the highly
polluting coolants used in refrigerators and air conditioners. Those measures were
included in a massive spending bill signed by President Donald Trump shortly before
he left office. This year, Peters is pressing forward on several related bills, including
legislation aimed at reducing methane emissions from natural gas and modernizing
the national power grid not only to make it more safe and secure, but to allow for
interstate transmission of electricity from clean energy sources such as hydropower,
wind and solar. On the one hand, Peters said he was surprised by the recent bipartisan
action given the existing political climate. “It’s not the culture of Congress right now,” he
said. But he also said it was clear momentum had been building. Peters said concern
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over global warming has grown across the political spectrum in recent years. Both the
House and Senate now have bipartisan climate-solutions caucuses and business
leaders, in general, are backing their goals. Recently, the U.S. Chamber of Commerce
announced that it had “updated our position on climate change by supporting a marketbased approach to accelerating greenhouse gas emissions reductions across the U.S.
economy.” While the legislation passed in December received wide praise from
environmental and business leaders alike, some environmental organizations are wary
of relying too much on market forces and continue to advocate for an aggressive,
comprehensive strategy by the federal government, namely the proposed Green New
Deal. President Joe Biden didn’t go as far as backing the Green New Deal, which not
only broadly targets climate change but also focuses on social justice, employment,
housing and health. But he came into office proposing a sweeping climate change plan
that would spend trillions of dollars on clean energy initiatives and related job
creation, along with calling for the U.S. to have “net zero” greenhouse gas emissions
by 2050. While not as extensive as the Green New Deal, Biden’s plan incorporates some
of its components and concepts. Further, he is structuring his administration to have
climate change be a central focus across the federal government, from agencies that
deal with agriculture, the economy and national security as well as the environment. It’s
hard to overstate how much of a change that is from the climate-change-denying Trump
administration. Biden’s climate change governing philosophy combined with Democratic
majorities in the House and the Senate will give a boost to legislation aimed at lowering
the Earth’s temperature. But the 50-50 split in the Senate — with Democratic Vice
President Kamala Harris as the tie-breaking vote — means getting those initiatives
passed will be a struggle. Greater acceptance of climate change comes largely from
the overwhelming scientific evidence that it is happening. But Peters said there also
has been a growing moral argument for taking on global warming, with calls from
Pope Francis to evangelical Christian leaders to “protect God’s creation for
generations that come behind us.”
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Link 1: Crypto Mining regulation is political toxic
Nikhilesh De, 1-19-2021, business reporter at CoinDesk with a focus on regulators,
lawmakers and institutions, "What the Crypto World Should Watch for in the
Biden Era," CoinDesk, https://www.coindesk.com/biden-inauguration-cabinetcrypto-sec-cftc-occ)SEM
Congress: Bringing back real-time payments Let’s get to the really interesting bits:
Senator Sherrod Brown (D-Ohio) is going to run the Senate Banking Committee for the
next Congressional session, and one of his focuses will be on real-time payments and
how to implement them, as well as in bringing the financially excluded onto payment
rails. An idea being tossed around is postal banking, where post offices (which are
plentiful) are able to provide certain financial services. Rohan Grey, a legislative adviser
who helped create the STABLE Act, said FedAccounts will likely receive a lot of attention.
Brown himself mentioned the concept during a virtual media availability. “The Fed will
administer, not subsidize, a no-fee account. It can be done online, it can be done at post
offices … you can get access perhaps at a small bank in your neighborhood,” he said of
the idea. One common perception around crypto is that proof-of-work networks like
Bitcoin are incredibly energy intensive and are primarily powered by oil or coal plants.
Industry participants say hydroelectric and other forms of renewable energy sources are
used instead. Either way, regulators like the New York Department of Financial Services
and CFTC are warning their regulated firms to be mindful of the environmental costs of
their services. Crypto miners in the U.S. in particular may see new requests or
regulations heading their way. The other major storyline to watch out for is how
exactly Congress will proceed in the coming weeks and months. We all saw the mob
breach the U.S. Capitol Building in January, followed by several Republican Senators and
Representatives objecting to the acceptance of the certified Electoral College votes from
the states of Arizona and Pennsylvania. Several members of the Congressional
Blockchain Caucus gave speeches and voted against accepting the votes – essentially
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disagreeing with consensus, to use a rough crypto analogy. Punchbowl News reported
that some Democratic lawmakers and aides are considering freezing the objectors out of
parts of the legislative process. This could mean that bills introduced by blockchain
proponents like Rep. Warren Davidson (R-Ohio), such as the Token Taxonomy Act,
might go nowhere if they’re introduced or reintroduced this year. Kristin Smith,
executive director of the Blockchain Association, said the “political tensions right now
are incredibly high,” and noted that “there’s currently a lot of pressure on Democrats
to stop working across the aisle with anyone who voted the other way” last week,
though she expects this to subside as time moves on. “The Democrats may have the
White House, the House and the Senate today but they won’t always be on that side of
things and they’ll want to work across the aisle when they’re in the minority as well,”
she said. “I’m hopeful we’ll return to seeing some bipartisanship.”
Link 2: Blockchain Association lobbying would make the situation toxic
Brian Fung, Washington Post, 9-11-2018 ["Get ready for Big Bitcoin: Cryptocurrency
industry opens a D.C. lobbying arm",
https://www.washingtonpost.com/technology/2018/09/11/get-ready-bigbitcoin-cryptocurrency-industry-opens-dc-lobbying-arm/?noredirect=on, 10-102021] Srikar T. S.
The price of bitcoin may be down, compared with last year's meteoric heights. But
industry officials aren't waiting for the next spike in investor demand to launch a charm
offensive targeting federal lawmakers and regulators who've taken an interest in
cryptocurrencies. Tech veterans and a number of high-profile cryptocurrency
companies on Tuesday said they are forming the Blockchain Association, the first fully
fledged lobbying group in Washington representing entrepreneurs and investors who
are building off the technology behind bitcoin. Joining the initial push are companies
such as Coinbase and Circle, which operate some of the world's most popular virtual
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currency exchanges, as well as the technology start-up Protocol Labs. Investors, such as
Digital Currency Group and Polychain Capital, are also among the founding members.
The group has already made its first hire: Kristin Smith, who was an aide to then-Sen.
Olympia J. Snowe (R-Maine) and went on to lobby on blockchain issues for
Overstock.com, the online retailer that in 2014 began accepting payments in bitcoin.
"I've been spending a lot of time doing a lot of the basic education work in this space,”
said Smith, who is expected to guide the trade group through its early steps. “I'm
excited to focus exclusively on these issues." Policymakers have been confronted in
recent months with an array of cryptocurrency issues as investors have flocked to
bitcoin and other virtual currencies. The technology on which they're based raises
novel questions about financial regulation in a digital age — and in some cases,
consumers have become the victims of scams that have attracted attention from state
and federal regulators. Congressional hearings on cryptocurrency and recent decisions
by the Securities and Exchange Commission have also highlighted bitcoin's and other
cryptocurrencies' growing profile.
Link 3: Specifically, expansion of SEC through the CON will face democratic backlash.
Posted By, Cooley PubCo, 1-13-2021 ["Will the new Congress use the Congressional
Review Act to nullify recent rulemakings?",
https://cooleypubco.com/2021/01/13/new-congress-congressional-review-act/,
10-10-2021] Srikar T. S.
So what might the new Congress consider the most tempting SEC candidates for
disapproval under the CRA? The Coalition for Sensible Safeguards has identified the new
shareholder proposal rule (published in the Federal Register on 11/04/2020) and the
new proxy advisor rule (published in the Federal Register on 9/03/2020) as candidates
within the CRA lookback window. Both of these rulemakings were the subject of strong
dissents from the Democratic SEC Commissioners. For example, Commissioner Allison
Lee viewed the shareholder proposal rule as the “capstone in a series of policies that
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will dial back shareholder oversight of management at the companies they own,”
putting “a thumb on the scale for management in the balance of power between
companies and their owners.” (See this PubCo post.) With regard to the rulemaking on
proxy advisory firms, Lee objected to the rule changes as “unwarranted, unwanted,
and unworkable.” According to Lee, the new rules will “increase issuer involvement in
what is supposed to be independent advice from proxy advisory firms. The release still
wholly fails to explain how amplifying the views of issuers will improve the substance of
proxy voting recommendations. The final rules will still add significant complexity and
cost into a system that just isn’t broken, as we still have not produced any objective
evidence of a problem with proxy advisory firms’ voting recommendations. No
lawsuits, no enforcement cases, no exam findings, and no objective evidence of
material error—in nature or number. Nothing.” (See this PubCo post.) And as discussed
in this PubCo post, the SEC’s Investor Advocate recommended reversal of both of these
rulemakings.
Empiric: 8 senators opposed regulation.
Bilal Jafar ---news reporter. "Congress Members Raise Concerns over US Treasury’s
Cryptocurrency Rule”, Finance Magnates, 1/1/21,
https://www.financemagnates.com/cryptocurrency/news/congress-membersraise-concerns-over-us-treasurys-cryptocurrency-rule/
US Congressman, Tom Emmer, along with seven other Congress members sent a letter
to the US Treasury Secretary, Steven Mnuchin demanding a comment period
extension of the proposed FinCEN regulation for cryptocurrency assets. The letter
states that the 15 day comment period is too short to have a meaningful discussion on
the newly proposed cryptocurrency KYC rules. Congress members, Tom Emmer, Warren
Davidson, David Schweikert, Ted Budd, Bill Foster, Suzan K. DelBene, Darren Soto and
Tulsi Gabbard wrote a letter to Mnuchin and asked the US Treasury to extend the
comment period to at least 60 days. The letter mentioned that a rushed process would
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threaten the legitimacy of the proposed cryptocurrency rule. “We write to express our
concerns regarding the process to respond to the Financial Crimes Enforcement
Network’s (FinCEN) Notice of Proposed Rulemaking (NPRM) related to requirements
for certain transactions involving convertible cryptocurrency or digital assets. We are
concerned that the Treasury Department’s approach to establishing complex new
rules for the recordkeeping and reporting of convertible virtual currency and legal
tender digital asset transactions do not afford the American public a reasonable
opportunity to respond,” the official letter states. Additionally, Congress members
asked the Treasury Secretary to delay the implementation of the proposed rule by at
least six months to give all stakeholders an appropriate timeframe to develop the
technological solutions that will be required to implement any final rule. FinCEN
requested comments on the proposed cryptocurrency regulations in December.
According to the proposed regulations, crypto exchanges will be required to verify the
identity of crypto wallet owners if the transaction exceeds $3,000. US Congress
members mentioned in the recent letter that the 15 day comment period is too short
for the public and the stakeholders. “This is a highly complex rulemaking as the 24
detailed questions that FinCEN asks in the notice attest. It would be impossible for the
public to give a meaningful comment with so little time, and a rushed process
threatens the legitimacy of this rule. It also makes the new regulations very
susceptible to legal challenges,” the letter cites.
Impact: Climate change causes extinction – it’s try or die
Kareiva, P., & Carranza, V. (2018, January 5). Existential risk due to ecosystem collapse:
Nature strikes back. Futures. Retrieved October 10, 2021, from
https://www.sciencedirect.com/science/article/pii/S0016328717301726?via%3D
ihub.
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In summary, six of the nine proposed planetary boundaries (phosphorous, nitrogen,
biodiversity, land use, atmospheric aerosol loading, and chemical pollution) are unlikely
to be associated with existential risks. They all correspond to a degraded environment,
but in our assessment do not represent existential risks. However, the three remaining
boundaries (climate change, global freshwater cycle, and ocean acidification) do pose
existential risks. This is because of intrinsic positive feedback loops, substantial lag
times between system change and experiencing the consequences of that change, and
the fact these different boundaries interact with one another in ways that yield
surprises. In addition, climate, freshwater, and ocean acidification are all directly
connected to the provision of food and water, and shortages of food and water can
create conflict and social unrest. Climate change has a long history of disrupting
civilizations and sometimes precipitating the collapse of cultures or mass emigrations
(McMichael, 2017). For example, the 12th century drought in the North American
Southwest is held responsible for the collapse of the Anasazi pueblo culture. More
recently, the infamous potato famine of 1846–1849 and the large migration of Irish to
the U.S. can be traced to a combination of factors, one of which was climate.
Specifically, 1846 was an unusually warm and moist year in Ireland, providing the
climatic conditions favorable to the fungus that caused the potato blight. As is so often
the case, poor government had a role as well—as the British government forbade the
import of grains from outside Britain (imports that could have helped to redress the
ravaged potato yields). Climate change intersects with freshwater resources because it
is expected to exacerbate drought and water scarcity, as well as flooding. Climate
change can even impair water quality because it is associated with heavy rains that
overwhelm sewage treatment facilities, or because it results in higher concentrations
of pollutants in groundwater as a result of enhanced evaporation and reduced
groundwater recharge. Ample clean water is not a luxury—it is essential for human
survival. Consequently, cities, regions and nations that lack clean freshwater are
vulnerable to social disruption and disease. Finally, ocean acidification is linked to
climate change because it is driven by CO2 emissions just as global warming is. With
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close to 20% of the world’s protein coming from oceans (FAO, 2016), the potential for
severe impacts due to acidification is obvious. Less obvious, but perhaps more
insidious, is the interaction between climate change and the loss of oyster and coral
reefs due to acidification. Acidification is known to interfere with oyster reef building
and coral reefs. Climate change also increases storm frequency and severity. Coral
reefs and oyster reefs provide protection from storm surge because they reduce wave
energy (Spalding et al., 2014). If these reefs are lost due to acidification at the same
time as storms become more severe and sea level rises, coastal communities will be
exposed to unprecedented storm surge—and may be ravaged by recurrent storms. A
key feature of the risk associated with climate change is that mean annual temperature
and mean annual rainfall are not the variables of interest. Rather it is extreme episodic
events that place nations and entire regions of the world at risk. These extreme events
are by definition “rare” (once every hundred years), and changes in their likelihood are
challenging to detect because of their rarity, but are exactly the manifestations of
climate change that we must get better at anticipating (Diffenbaugh et al., 2017).
Society will have a hard time responding to shorter intervals between rare extreme
events because in the lifespan of an individual human, a person might experience as
few as two or three extreme events. How likely is it that you would notice a change in
the interval between events that are separated by decades, especially given that the
interval is not regular but varies stochastically? A concrete example of this dilemma can
be found in the past and expected future changes in storm-related flooding of New York
City. The highly disruptive flooding of New York City associated with Hurricane Sandy
represented a flood height that occurred once every 500 years in the 18th century, and
that occurs now once every 25 years, but is expected to occur once every 5 years by
2050 (Garner et al., 2017). This change in frequency of extreme floods has profound
implications for the measures New York City should take to protect its infrastructure
and its population, yet because of the stochastic nature of such events, this shift in flood
frequency is an elevated risk that will go unnoticed by most people. 4. The combination
of positive feedback loops and societal inertia is fertile ground for global environmental
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catastrophes. Humans are remarkably ingenious, and have adapted to crises throughout
their history. Our doom has been repeatedly predicted, only to be averted by innovation
(Ridley, 2011). However, the many stories of human ingenuity successfully addressing
existential risks such as global famine or extreme air pollution represent environmental
challenges that are largely linear, have immediate consequences, and operate without
positive feedbacks. For example, the fact that food is in short supply does not increase
the rate at which humans consume food—thereby increasing the shortage. Similarly,
massive air pollution episodes such as the London fog of 1952 that killed 12,000 people
did not make future air pollution events more likely. In fact it was just the opposite—the
London fog sent such a clear message that Britain quickly enacted pollution control
measures (Stradling, 2016). Food shortages, air pollution, water pollution, etc. send
immediate signals to society of harm, which then trigger a negative feedback of society
seeking to reduce the harm. In contrast, today’s great environmental crisis of climate
change may cause some harm but there are generally long time delays between rising
CO2 concentrations and damage to humans. The consequence of these delays are an
absence of urgency; thus although 70% of Americans believe global warming is
happening, only 40% think it will harm them
(http://climatecommunication.yale.edu/visualizations-data/ycom-us-2016/). Secondly,
unlike past environmental challenges, the Earth’s climate system is rife with positive
feedback loops. In particular, as CO2 increases and the climate warms, that very
warming can cause more CO2 release which further increases global warming, and
then more CO2, and so on. Table 2 summarizes the best documented positive
feedback loops for the Earth’s climate system. These feedbacks can be neatly
categorized into carbon cycle, biogeochemical, biogeophysical, cloud, ice-albedo, and
water vapor feedbacks. As important as it is to understand these feedbacks individually,
it is even more essential to study the interactive nature of these feedbacks. Modeling
studies show that when interactions among feedback loops are included, uncertainty
increases dramatically and there is a heightened potential for perturbations to be
magnified (e.g., Cox, Betts, Jones, Spall, & Totterdell, 2000; Hajima, Tachiiri, Ito, &
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Kawamiya, 2014; Knutti & Rugenstein, 2015; Rosenfeld, Sherwood, Wood, & Donner,
2014). This produces a wide range of future scenarios. Positive feedbacks in the carbon
cycle involves the enhancement of future carbon contributions to the atmosphere due
to some initial increase in atmospheric CO2. This happens because as CO2 accumulates,
it reduces the efficiency in which oceans and terrestrial ecosystems sequester carbon,
which in return feeds back to exacerbate climate change (Friedlingstein et al., 2001).
Warming can also increase the rate at which organic matter decays and carbon is
released into the atmosphere, thereby causing more warming (Melillo et al., 2017).
Increases in food shortages and lack of water is also of major concern when
biogeophysical feedback mechanisms perpetuate drought conditions. The underlying
mechanism here is that losses in vegetation increases the surface albedo, which
suppresses rainfall, and thus enhances future vegetation loss and more suppression of
rainfall—thereby initiating or prolonging a drought (Chamey, Stone, & Quirk, 1975). To
top it off, overgrazing depletes the soil, leading to augmented vegetation loss (Anderies,
Janssen, & Walker, 2002). Climate change often also increases the risk of forest fires,
as a result of higher temperatures and persistent drought conditions. The expectation
is that forest fires will become more frequent and severe with climate warming and
drought (Scholze, Knorr, Arnell, & Prentice, 2006), a trend for which we have already
seen evidence (Allen et al., 2010). Tragically, the increased severity and risk of Southern
California wildfires recently predicted by climate scientists (Jin et al., 2015), was realized
in December 2017, with the largest fire in the history of California (the “Thomas fire”
that burned 282,000 acres, https://www.vox.com/2017/12/27/16822180/thomas-firecalifornia-largest-wildfire). This catastrophic fire embodies the sorts of positive
feedbacks and interacting factors that could catch humanity off-guard and produce a
true apocalyptic event. Record-breaking rains produced an extraordinary flush of new
vegetation, that then dried out as record heat waves and dry conditions took hold,
coupled with stronger than normal winds, and ignition. Of course the record-fire
released CO2 into the atmosphere, thereby contributing to future warming. Out of all
types of feedbacks, water vapor and the ice-albedo feedbacks are the most clearly
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understood mechanisms. Losses in reflective snow and ice cover drive up surface
temperatures, leading to even more melting of snow and ice cover—this is known as the
ice-albedo feedback (Curry, Schramm, & Ebert, 1995). As snow and ice continue to melt
at a more rapid pace, millions of people may be displaced by flooding risks as a
consequence of sea level rise near coastal communities (Biermann & Boas, 2010; Myers,
2002; Nicholls et al., 2011). The water vapor feedback operates when warmer
atmospheric conditions strengthen the saturation vapor pressure, which creates a
warming effect given water vapor’s strong greenhouse gas properties (Manabe &
Wetherald, 1967). Global warming tends to increase cloud formation because warmer
temperatures lead to more evaporation of water into the atmosphere, and warmer
temperature also allows the atmosphere to hold more water. The key question is
whether this increase in clouds associated with global warming will result in a positive
feedback loop (more warming) or a negative feedback loop (less warming). For decades,
scientists have sought to answer this question and understand the net role clouds play
in future climate projections (Schneider et al., 2017). Clouds are complex because they
both have a cooling (reflecting incoming solar radiation) and warming (absorbing
incoming solar radiation) effect (Lashof, DeAngelo, Saleska, & Harte, 1997). The type of
cloud, altitude, and optical properties combine to determine how these countervailing
effects balance out. Although still under debate, it appears that in most circumstances
the cloud feedback is likely positive (Boucher et al., 2013). For example, models and
observations show that increasing greenhouse gas concentrations reduces the low-level
cloud fraction in the Northeast Pacific at decadal time scales. This then has a positive
feedback effect and enhances climate warming since less solar radiation is reflected by
the atmosphere (Clement, Burgman, & Norris, 2009). The key lesson from the long list
of potentially positive feedbacks and their interactions is that runaway climate
change, and runaway perturbations have to be taken as a serious possibility. Table 2 is
just a snapshot of the type of feedbacks that have been identified (see Supplementary
material for a more thorough explanation of positive feedback loops). However, this list
is not exhaustive and the possibility of undiscovered positive feedbacks portends even
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greater existential risks. The many environmental crises humankind has previously
averted (famine, ozone depletion, London fog, water pollution, etc.) were averted
because of political will based on solid scientific understanding. We cannot count on
complete scientific understanding when it comes to positive feedback loops and
climate change.
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CON: Neoliberalism
Argument: Regulation is a neoliberal move to continue problematic processes.
Link: Regulation is rooted in Neoliberal Thought
Jovana Jezdimirovic, springerprofessional.de, xx-xx-2019 ["Regulating US Private
Security Contractors", https://www.springerprofessional.de/en/regulating-usprivate-security-contractors/16413630, 10-9-2021] Srikar T. S.
With the downsizing of national armies after the end of the Cold War, Private Security
Companies (PSC) gained a new place in the market for force as a consequence of several
factors: the demise of ideological confict and the resulting necessity to be prepared to
enter into direct combat with another state with a reduced number of state troops (and
consequently seeking support functions fulflled by contractors), the increase of UN
peace missions, and ideological demand for outsourcing a state’s provision of the
services (Avant 2005, 30; Kinsey 2006, 151; Krahmann 2010, 4; Stanley 2015). The
limited capacity of national armies to respond rapidly to security threats, and an
urgency factor highlighted by the 9/11 attacks, led to increasing security outsourcing to
unimaginable proportions in order to attain ambitious foreign and domestic policy
goals (Avant and De Nevers 2011). In fact, on several occasions, the number of private
contractors surpassed the number of regular troops operating in hostile environments
(Dunigan 2011, 52). Moreover, the lack of preparation for such a rapid increase often
led to misconduct on the part of contractors, a fact that alarmed decision-makers and
highlighted the inadequacy of the existing regulation of this crucial sector (GAO 2005,
2006, 2012). This change in the structural relationship between the state—until then
considered as the sole provider of security services, and equipped to use violence
outside its borders—and private actors was systemic, and the rapid expansion in the
provision of violence in the name of the state outside of borders in volatile
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environments, unsurprisingly caused an outcry calling for more regulation. The classical
theories used by the International Relations (IR) have not been very effective in treating
the problems resulting from such a power shift, as the complexity of relationships
affecting the regulatory process could not be fully understood by them (Avant 2005;
Krahmann 2010; Percy 2013). One of the most-used approaches to explain regulatory
struggles is neoliberalism, and later on regulatory capitalism, not only considering
security outsourcing but more broadly (Aglietta 2000; O’Brien 2005; Collins 2011; Moran
2002; Glaeser and Shleifer 2003; Shearing 2003). The neoliberal thinking was often
introduced in liberal democracies through regulatory policies. This became widespread
in the Western world, essentially in the last two decades of the twentieth century. There
are many explanations of the changes brought by the regulatory state (Moran 2002;
Scott 2000; Sunstein 1993), but here I use John Braithwaite’s defnition (2000). He
assumes that the biggest change to the Keynesian state (which he defnes as statecentric, and with a socialist orientation on the use of force, where the state does all the
“rowing” and little of the “steering”) to the new regulatory state, was the difference of
deregulation, privatization, and for implementation of “governing at a distance,” or
shift from rowing for more and better steering (Braithwaite 2000, 225). The dominance
of this new paradigm of government that appeared with the regulatory approach,
shifted the focus from the delivery of services to their oversight and regulation, a
transformation that some criminologists entitled as a change from rowing to steering
(Osborne and Gaebler 1992). The metaphor refers to a boat where the function of the
state changes from paddling the boat (executing the rowing component) to the state
just being at the helm (steering the boat). Such transformation represents the structural
change that is referenced here: the structure where the state passes from monopolistic
position regarding a provision of security services to a supervisor of provision and
opens the market for competition. For instance, internally, such change can be noticed
in the outsourcing of the security provision in the commercial zones or protection of
people and properties. The shift where the state has been seen as a unique provider of
those services is gone and has been altered to be one of the providers, opening the
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space for outsourcing of those tasks, and occupying the primary role of the market
regulator and transforming in one of the providers. The change in which there is a
multiplication of actors involved in regulatory space, the consequent social place they
occupy in the regulatory process and new dynamics created between all of the actors
involved in these new regulatory processes are usually not explored by neoliberalism.
What neoliberalism proposed was to look at the world through well-established
structured, well-defned categories and through the logic of a free market. It was looking
at the outcomes that came through such structures and explaining the realities through
neoliberal doctrine that had an aim to privatize, deregulate, and diminish the public
sphere. Neoliberalism was often employed to justify deregulation of state control over
major industries, shrinking and privatization of public services, and enhancement of
international capital mobility, among others, to catapult economic growth (Brenner and
Theodore 2002, 350). In the security sector, these goals have been faced with caution,
because of the sensitivity of the topic, since the use of the violence by private agents
acting in the name of state was in question. The neoliberal structural change, which
implied inclusion of multiple actors and agents in regulatory process, saw regulatory
process as certain liberation of the state “claws” and outsourcing security support
services that previously have been executed solely by the state. As a result, the private
security contractors have been introduced in post-confict operations, executing the
tasks contracted by the state, under a regime different from the military. Abrahamsen
and Williams (2010) named such change as global security assemblages, the new set of
relationships, where the blurring between public–private and local–global division lost
the importance it had held in the past. The neoliberal analysis applied to the regulatory
process of private security providers focuses on structural level when responsibility for
oversight and control of the use of force passed from monopoly by state to outsourcing
it to private agents. Neoliberal view, through regulatory state approach, has a new take
on the network relationships, where the old hierarchical relationships are gone and a
new sort of state and nonstate hybrid alliances are formed (Crawford 2006, 450). Some
may imply that security regulation in the old system, when outsourcing of sensitive
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functions that may imply civilian victims was marginal, had far less political weight than
the current one has. It certainly was more technocratic, with an established system of
checks and balances. In the new system, the checks and balances applied to the military
have not been expanded to the private entities providing services. Instead, the industry
started operating and growing in a certain legislative and procedural vacuum and have
been built upon. That is the space that Kimberly Brown (2013) suggested spreading
accountability present in the regular military to the private actors as benefcial for the
new structure in order to stabilize the power, limiting the effects that new structure
caused. On ever present concerns over lack of tools and structures that would
successfully oversee and control security contracts, neoliberalism would defend the
benefts of putting those services at open market, which would promote competition
and consequently improve quality of the services provided. Considering regulations per
se, neoliberalism considers that monopoly represented “command and control” type
of regulation while neoliberalism offers more “managerial,” softer type of regulation,
the one that focuses on cooperation between regulator and regulated, their solutions
considering risk-based regulation, fortifying internal control systems of companies and
with aim to achieve regulation through self-regulation (Baud and Chiapello 2017,
4). Neoliberal regulatory analysis would therefore focus on structures involved in these
regulatory solutions, and consequently ignore/tune-off analysis beyond structures and
outcomes, like dynamics between agents involved, and their effects on both process
and outcomes. Such analysis would not be bothered with process itself, and why some
decisions have been made and not others, it would look to justify decisions made
through neoliberal ideological assumptions. The multiplication of the agents involved
directly or indirectly in the regulatory process (such as NGOs, oversight
institutions (i.e., GAO, SIGIR, SIGAR), academics, industry) led to the decentralization
of regulation, where the state is not a unique regulatory input anymore, emphasizing
other regulatory infuences. The state’s role in the new context is to maintain a
regulatory network monitored by the state institutions established with such aim, jointly
investing in legal coercion as a method of its enforcement through the established
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bureaucratic hierarchy (King 2007, 63). The regulation of standards of behavior and
integrating the consequences for failure of compliance is an institutionalized process
that defnes the practices rooted in everyday life (Cetina et al. 2001). It implies the
presence of the law, accompanied by control mechanisms, formal and direct,
established with the explicit purpose of preventing or reducing injustice, corruption,
negligence, or incompetence (Teichert 2014). Regulation can take many forms among
which state rules and regulations and self-regulation by the private security industry
itself are focused here. Under the concept of the state, regulations are considered forms
and direct mechanisms through which the state exercises control over the activities
contracted to private security providers. Under the self-regulation of the industry are
considered standards established by trade (industry) associations that are voluntary and
do not have legislative or criminal punishment as a means of enforcement. Civil society
and media, through their different forms, have been active in the security industry,
particularly via denouncements of misconduct, in performing pressure toward political
elite and the industry itself, seeking more effcient regulation of the sector.
Evidence: Capitalists want Crypto to fail – means they want government to drown markets.
T.C. Gunter, Medium, 08-25-2021 ["Capitalists Hate Crypto: The Big Reason They Don’t
Want You to Have It", https://medium.com/geekculture/capitalists-hate-cryptothe-big-reason-they-dont-want-you-to-have-it-7827bda44c6a, 10-9-2021] Srikar
T. S.
Capitalists can’t allow the everyday person consumer power since they rule with their
money. So they don’t like this new arrangement, where people have control of their
wealth and can use it however they choose. That makes crypto a threat to them
because it means less power for them and more freedom for you. If we want crypto to
succeed, then our responsibility is clear: we need to learn how to use these powerful
tools wisely to maintain as much autonomy as possible while still living within a
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capitalist society. In this article, we’ll look at how capitalists back their fiat currency with
assets and gatekeep the means of production by creating barriers to entry, yet how the
means of production isn’t possible without the working class. Also, we’ll look at fiat
currency’s backing, cryptocurrency’s backing, how they aren’t that different, and finally,
the capitalists need to keep the working class from success and what you can do about
it. What is the current model of the capitalist system in comparison to the consumer
class? A capitalist system is a form of economic organization in which the means of
production and distribution are privately or corporately owned. In other words,
capitalists are owners who produce goods or services for profit. On the other hand, the
consumer class refers to those that consume without producing. The current model of
capitalism is one where there are barriers to entry and gatekeepers; however, they need
the working class as it’s not possible without them. However, this isn’t true in cryptocapitalism, where anyone can start mining with little more than their computer at home
— thus making it much easier for everyone to access wealth creation opportunities.
Furthermore, Crypto-capitalism has no gatekeepers because you don’t need an
invitation from anyone to participate in its economy, unlike fiat currency which is
available only to those with access to the correct banking channels. The role of fiat
currency is to serve as a means of exchange, a unit of account, and a store of value (see
above image). Property rights are established by writing laws on paper that have force
via threat of violence [establishing monetary policy. We can observe this in our current
capitalist systems through the legal framework designed to protect property rights.
What would happen to the capitalist class if the consumer class stopped consuming? If
the capitalist class had their way, every single person would have to be a wage slave.
But if we stopped consuming and working, what would happen? For capitalism to
function, there need to be two classes: those who own factories and other means of
production (the capitalists) and those who produce the goods or services in high
demand (the workers). These two groups need each other — without either group,
there can’t be any production in its current incarnation. But if enough people stop
buying into this system by refusing to work or consume, it will collapse under its weight.
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And with crypto-capitalism on the rise, where anyone can participate in its economy at
little more than their home computer, many people are starting to see how powerful
cryptocurrency is as a tool to change the status quo. And that’s why capitalists are so
against it — they can’t have people being freed from their control since they need them
to keep the system going and growing. How do fiat currencies like USD function? Fiat
currency isn’t backed by anything tangible, but it still has value because of the legal
framework that is put in place to protect property rights. Fiat currency’s backing comes
from many different sources, but the essential support is trust and faith in that currency
as a medium for exchange. One form of fiat currency’s backing is social consensus or
popularity — we associate money with being valuable because the people around us
attribute value to it and agree on that value. The most common backing fiat currency
has — the one we are all very familiar with is legal tender laws. These refer to a
government’s official policy or preference for using a particular medium of exchange
(i.e., currency) for payment of debts, taxes, and similar obligations within its jurisdiction.
For example, the United States government requires that all taxes be paid using U.S.
dollars (for more information on legal tender laws, visit this site ). Fiat currency has
value because we agree it does and because there are consequences for violating those
agreements — like going to prison or having fines levied against you. If you take away
the legal framework, then there is no value in fiat currency or problem with using an
alternative. Without government backing or a social consensus, then it’s just pieces of
paper with ink on them, and it has no value. This is why we have seen governments
worldwide implementing legal tender laws to protect their currencies. How does
cryptocurrency function? Cryptocurrency is a new kind of money that isn’t controlled by
any central authority. You can think of it as the internet: there are servers and nodes
worldwide, but no single server controls everything. That means that nobody has
control over cryptocurrency, not even its inventor. Instead, it runs on an open-source
platform where anyone can participate in the system at little more than their home
computer. The best way to understand how cryptocurrency works are to see it as two
things: a currency (money) and an app store (like iTunes). The currency part allows you
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to buy goods or services from people who accept cryptocurrencies — just like using
Canadian dollars or Euros would enable you to do the same thing with merchants who
accept Canadian dollars or Euros as a method of payment. The app store part allows you
to purchase apps that can help automate processes within your business, decrease
transaction costs by eliminating the middle-man in transactions, and even prevent
government seizure of funds. Cryptocurrency is backed in a similar way to fiat in that
there is a social consensus and (somewhat of a) legal framework that protects it.
However, that could be changing if capitalists use their government lackeys to push
through destructive legislation and laws. What can the consumer class do to keep
cryptocurrency alive? Consumers must support cryptocurrency. Because of people like
you, the system can grow and change, so if you want to see an economy free from
government control, then you must take action. To do this, consumers need to use
their buying power to open up new markets for crypto by supporting merchants who
accept it in their area. They should also make sure they are using cryptocurrencies for
all transactions that they can and invest money in crypto rather than stocks whenever
possible. We need more adoption (buyers), not just awareness (sellers), to survive while
expanding. Conclusion The only way for cryptocurrency to survive and grow is through
increased adoption by the consumer class. We need more buyers than sellers for this
new form of money to work, so if you’re a crypto-enthusiast, then now is the time to
start using it yourself and supporting those who accept payment with cryptocurrencies
like Bitcoin or Ethereum. In addition, investing in cryptocurrency is critical to its survival.
The more we invest, the more valuable it becomes. In short, it is about adoption and
making it commonplace. And, then, its impact can not be ignored or legislated away by
capitalist pawns. Do you think cryptocurrency gives power to the common people?
Impact: Neolib root cause of basically every scenario
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Judith Deutsch, No Publication, xx-xx-2009 ["Peace Magazine v25n3p18: Pestilence,
Famine, War, Neoliberalism, and Premature Deaths",
http://peacemagazine.org/archive/v25n3p18.htm, 10-10-2021] Srikar T. S.
The outlook for this century is dim. Climate change and nuclear weapons pose everworsening threats, and the living conditions on our "planet of slums" continue to
deteriorate. Although a great deal is known about preventing premature deaths, there
is a profound paralysis in applying this knowledge in an effective way. Worse still,
many commentators suggest that there is a powerful worldwide elite who accrue
wealth by increasing greenhouse gas emissions, by investing in nuclear weapons and
militarism, and who are systematically depriving the majority world and nature of the
right to life. There is a narrow time scale for reversing these trends in that scientists
on the Intergovernmental Panel on Climate Change now predict a possible 90%
extinction rate by the end of this century unless our way of life changes drastically. A
significant fact about the Nazi Holocaust was the belief that "it can't happen here."
People were in a state of denial about the readily apparent ominous danger. A
number of fine films convey this delusion of safety in various societies. The Garden of
the Finzi-Continis (Vittorio De Sica), and Burnt by the Sun (Nikita Mikhalkov) paint
pictures of the exquisite, subtle beauty of life, while the characters are oblivious to
their destiny in concentration camps and the Soviet gulag. There are exact parallels
now: the perils to existence are barely mentioned in the media. Also, distortions and
outright lies minimize the magnitude of the problems. FOUR THREATS TO HUMAN
EXISTENCE At present, threats to human existence come from at least four directions:
climate change with its consequences of catastrophic climate events and of drastic
water and food shortages; from nuclear war; from pandemics; from the severe
impoverishment and destruction of society that is a result of neo-liberal restructuring.
All are due to human error. All are preventable. But the time factor is most crucial
around climate change. The lack of attention to the time scale is tantamount to
believing that "it can't happen here." Currently, most attempts to counter these
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dangers address the issues in isolation even though the main perpetrators implement
a unified, relatively coherent programme that unites these threats. Neo-liberal
plutocrats are the controlling shareholders of the large agri-business, weapons, water
privatization, pharmaceutical (anti national health care), mining, non-renewable
energy companies. It is their economic practices that decimate water resources,
deplete soil, pollute air, and increase greenhouse gas emissions. The culpable
individuals, their think tanks, the supportive government bureaucracies, and the
specific methods of control are well-documented in a number of recent works.1 From
recent history it is readily apparent that mass extinction "can happen here." A similar
confluence of climate events and exploitive socio-economic re-structuring occurred in
the late-Victorian period. Retrospective statistical studies established that worldwide
droughts between 1876 and 1902 were caused by El Nino weather events. Based on the
British Empire's laissez-faire approach to famine that enjoined against state
"interference" in the for-profit trade in wheat, between 13 million and 29 million people
died in India alone. True to the precepts of liberalism, the British converted small
subsistence farms in India into large scale monocrop farming for export on a world
market. The new globally integrated grain trade meant that disturbances in distant parts
of the world affected Indian farmers.
Alt: Vote CON to break open the space for resistance towards neoliberalism. The space is coopted
Bleiker 2, professor of international relations at the University of Queensland, Politics
After Seattle: Dilemmasof the Anti-Globalisation Movement,
conflits.revues.org/1057
46 While engendering a series of problematic processes, globalisation has also increased
the possibility to engage political issues. Before the advent of speed, for instance, a
protest event was a mostly local issue. But the presence of global media networks has
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fundamentally changed the dynamics and terrains of dissent. Political activism no longer
takes place solely in the streets of Prague, Seoul or Asuncion. The Battle for Seattle, for
instance, was above all a media spectacle, a battle for the hearts and minds of global
television audiences. Political activism, wherever it occurs and whatever form it takes,
has become intrinsically linked with the non-spatial logic of speed. It has turned into a
significant transnational phenomena.¶ 47With the exploration of new terrains of
dissent, global activists also face a series of political dilemmas. This essay has addressed
two of them : the tension between violent and nonviolent means of resistance, and the
issue of unequal representation, the question of who can speak for whom. Rather than
suggesting that these issues can be understood and solved by applying a pre-existing
body of universal norms and principles, the essay has drawn attention to the openended and contingent nature of the puzzles in question. Protest acts against the key
multilateral institutions of the world economy will continue, and so will debates about
the nature of globalisation and the methods of interfering with its governance.
Keeping these debates alive, and seeking to include as many voices, perspectives and
constituencies as possible, is a first step towards something that may one day
resemble globalisation with a human face.¶ 48But making global governance more
humane, more transparent and more democratic is no easy task. Principles of
transparency and democracy have historically been confined to the territorial
boundaries of the sovereign nation state. Within these boundaries there is the
possibility for order and the rule of law. But the space beyond is seen as threatening and
anarchical - that is, lacking a central regulatory institution. The standard realist response
to these perceptions is well know : protect sovereignty, order and civility at the
domestic level by promoting policies that maximise the state's military capacity and, so
it is assumed, its security.68 It is questionable to what extent realist policies remain
adequate - and ethical for that matter - at a time when process of globalisation have
lead to a fundamental transformation of political dynamics.¶ 49The Battle for Seattle,
and the media spectacle that issued form it, may well demonstrate that the struggle for
power takes place in a realm that lacks a central regulatory institution. But realist
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interpretations make the mistake of embarking on a fatalistic interpretation of this
political realm, constituting conflict as an inevitable element of the system's structure. It
may be more adequate - and certainly more productive - to characterise the
international system in the age of globalisation and transnational dynamics not as
anarchical, but as rhizomatic. For Gilles Deleuze and Félix Guattari a rhizome is a
multiplicity that has no coherent and bounded whole, no beginning or end, only a
middle from where it expands and overspills. Any point of the rhizome is connected to
any other. It has no fixed points to anchor thought, only lines, magnitudes, dimensions,
plateaus, and they are always in motion.69 How, then, is one to reach a moral position
in a world of webs, multitudes and multiplicities ? Are the lines, dimensions and
plateaus of the rhizome so randomly arranged that we are no longer able to generate
the kind of stable knowledge that is necessary to advance critique and, indeed, dissent ?
Is the very notion of political foundations still possible at a time when social
consciousness gushes out of five-second sound-bites and the corresponding hyperreal
images that flicker over our television screens ? Are there alternatives to realist
approaches that protect domestic order by warding off everything that threatens it from
the outside ? Answers to such questions do, of course, not come easy. And they may not
be uniform either. But an adequate response will need to engage in one way or
another with the search for political engagements beyond the territorial boundaries of
the nation state.¶ 50 An extension of democratic principles into the more ambiguous
international realm is as essential as it is difficult. It will need to be based on a
commitment to democracy that goes beyond the establishment of legal and
institutional procedures. William Connolly has pointed in the right direction when
arguing for a democratic ethos. The key to such cultural democratisation, he believes,
"is that it embodies a productive ambiguity at its very centre, always resisting attempts
to allow one side or the other to achieve final victory."70 Such a model is, of course, the
antithesis of prevailing realist wisdom, and perhaps of modern attitudes in general,
which seek to achieve security and democracy through the establishment of order and
the repression of all ambiguity.71¶ 51Rather than posing a threat to human security,
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the rhizomatic dimension of the international system may well be a crucial element in
the attempt to establish a democratic ethos that can keep up with the pace of
globalisation. Some aspects of democratic participation can never be institutionalised.
Any political system, no matter how just and refined, rests on a structure of exclusion. It
has to separate right from wrong, good from evil, moral from immoral. This separation
is both inevitable and desirable. But to remain legitimate the respective political
foundations need to be submitted to periodic scrutiny. They require constant
readjustments in order to remain adequate and fair. It is in the struggle for fairness, in
the attempt to question established norms and procedures, that global protest
movements, problematic as they are at times, make an indispensable contribution to
democratic politics.¶ 52 The political significance of protest movments is located
precisely in the fact that they cannot be controlled by a central regulatory force or an
institutional framework. They open up possibilities for social change that are absent
within the context of the established legal and political system.72 The various
movements themselves are, of course, far from unproblematic. The violent nature of
recent actions against neo-liberal governance may well point towards the need for
greater political awareness among activists. But such awareness can neither be
imposed by legal norms or political procedures. It needs to emerge from the struggle
over values that takes place in civil society. The fact that this struggle is ongoing does
not detract from the positive potential that is hidden in the movement's rhizomatic
nature. These elements embody the very ideal of productive ambiguity that may well be
essential for the long-term survival of democracy.
Analysis: This argument is particularly strategic for technical judges. It is a fairly simple
argument to explain. To be honest, in PF you do not need to read the alt, but you could use the
alt as some form of framing. I think people can read various framing cards on this issue (I
suggest reading Harvey and/or Giroux) to bolster this argument. Again even as a form of postfiat offense it outweighs due to the deutch evidence. You can also substitute the link with
basically any crypto bad argument and it will work.
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CON: Regulation grows crypto causing negative side effects
Argument: Regulation grows crypto
Link: Regulations jump start the industry and brings new investment
Sygna, xx-xx-xxxx ["Why Regulations Will Benefit the Crypto Industry in the Long
Run", https://www.sygna.io/blog/why-regulations-will-benefit-the-cryptoindustry-in-the-long-run/, 10-9-2021] Srikar T. S.
Regulation = Regular While most people attribute the 2008 bank crash to the greed and
negligence of big banks, the truth is a little more complicated, and indeed has more to
do with unregulated loopholes that those in power exploited, according
to Timothy Masad, ex-chairman of the Commodity Futures Trading Commission (CFTC):
What some Bitcoin enthusiasts fail to distinguish is that a primary cause of the global
financial crisis was the growth of financial intermediation outside our traditional
regulatory framework, rather than the mere existence of intermediation. Non-bank
mortgage originators, securitization, derivatives, and the government-sponsored
enterprises all contributed to dramatic growth in mortgage lending outside of
traditional banks… There was, in short, no prudential regulation of the so-called shadow
banking sector. Regulation = Regular. It’s the antithesis of the chaos that virtual assets
initially thrived in, and now seem to be bogged down by. Regulations establish order so
that a system can function more consistently, safely, with mostly predictable outcomes.
This means that in a more controllable environment, cryptocurrencies can be seen as a
normal, less volatile risk that can be managed with sophisticated technology and have
better protection. Why and how can regulations benefit the crypto industry? At
present, over 50% of Americans own stocks, yet according to a 2018 poll, only 2% own
Bitcoin. Over 1 in 4 U.S. residents are intrigued by cryptocurrency but won’t buy it
anytime soon, as its price volatility, longterm legal status and barriers to purchasing
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remain prohibitive. 1. Regulation creates binary virtual asset ownership Regulations
like FATF’s Recommendation 16 and FinCEN’s MSB and BSA travel rule requirements will
eventually divide crypto assets into two camps: regulated and unregulated. By tying the
real-world identities of crypto owners to virtual assets passing through compliant VASPs,
the crypto industry will be able to clean up its act. Exchanges and regulators can better
identify and isolate unsullied virtual currencies from those tainted by money laundering,
terrorism funding, and other crime. All stakeholders will be able to gradually trace the
origins of crypto as more verified real-world identities start to illuminate the blockchain.
This will drive bad actors to underground marketplaces, where their virtual assets will
either exist in a legal gray area or in clear violation of the law. This uncertainty will make
unregulated assets less fungible and therefore lower in value. Conversely, with
regulatory requirements making the status of certain virtual assets (e.g. Bitcoin,
stablecoins and privacy coins) and transmittal requirements binary, black or white, right
or wrong, VASPs and financial institutions will be able to prove the bona fides of crypto
under their custodianship, increasing its value as a long-term investment. This is
important not only for authorities but also for individual investors. A recent YouGov poll
showed that the average American is very distrustful towards cryptocurrency, even if
offered by a financial institution. Furthermore, most U.S. adults believe that
cryptocurrencies are more often than not used for illegal activity. Turning this
misconception around should be a collective goal for the entire crypto industry, and
regulation will make for a great ally. 2. Regulation makes virtual assets easy to
categorize and understand Presently, crypto-friendly financial institutions (FI’s) and
banks are very rare. This can directly be attributed to the long-view legal uncertainty of
virtual assets and the time-draining and costly AML/KYC compliance systems required,
which is hampered even further by the lack of technical knowledge and ambiguous
regulations that can be announced unexpectedly. Only with clearer regulatory guidance
can financial institutions start to shed light on gray areas and classify assets through a
long-term lens, according to their legal status. This helps FI’s forego risk as long as they
meet transparent rules and regulations ensconced in financial law. However, it’s still a
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long way off. Already we can see the impact that regulation is having on the industry,
with the recent delisting of several privacy coins from many Asian exchanges a clear
indicator that VASPs are taking tough steps in order to get their house in order. 3.
Regulation gives FI’s green light to invest Authorities and financial institutions move
notoriously slowly when it comes to technical innovation, thanks to outdated systems,
bureaucracy, cross-border monetary restrictions and little financial impetus to change
the status quo. This can be witnessed in the panicked knee-jerk reaction authorities and
central banks worldwide had to the unveiling of Libra, a perceived threat to the global
financial system that they were completely unprepared for. For example, the SWIFT
foundation was founded in 1973, but only went live with its messaging service in 1977
and expanded to Asian countries like Singapore and Hong Kong in the 1980s, after
clearing several cross-border hurdles. Traditional finance is not intrinsically an industry
that thrives on disruptive technology. Regulation makes innovation easier to classify
and therefore understand. Financially institutions need to clearly understand the
landscape in which a new asset class operates, and the risk factors associated with it,
before it can actively embrace and promote it. Under present circumstances, this is
impossible.
Link Nuance: SEC is especially bad at regulation
Diego Zuluaga, Cato Institute, 06-05-2019 ["The SEC Can't Keep Kik-ing the Crypto Can
Down the Road", https://www.cato.org/commentary/sec-cant-keep-kik-ingcrypto-can-down-road, 10-9-2021] Srikar T. S.
Fleeing the US Indeed, major industry players like Binance and Circle have already
either fully or partially geo-blocked United States IP addresses from using their
services. Companies and talent have relocated to friendlier jurisdictions, such as
Singapore and Switzerland. U.S. consumers and investors have been forced to forgo
participation in what could be beneficial innovation in which they have a right to
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partake. Given America’s pre-eminent status as a financial and technology hub, and the
large size of U.S. consumer and investment markets, this shift in geographic location
appears to be mainly due to a failure of regulation. As the main regulator and the most
aggressive when it comes to cryptocurrencies, the SEC has, however unwittingly,
prolonged regulatory uncertainty.
Impact: Environment
Tiffany C., MSNBC, 3-15-2021 ["The crypto fad might not burn out — but our planet
could", https://www.msnbc.com/opinion/bitcoin-nfts-other-crypto-fads-aredestroying-our-planet-n1261139, 10-9-2021] Srikar T. S.
It’s a fascinating technology, but unfortunately it takes a tremendous amount of
energy to power these computers at the scale currently needed to sustain and grow
crypto markets. A new study from Cambridge University found that mining bitcoin,
perhaps the best known blockchain-backed digital currency, now consumes more
energy per year than the entire nation of Argentina. Another study estimates that
bitcoin’s carbon emissions are on track to equal that of the entire city of London.
Scholars also argue that bitcoin emissions alone could raise the Earth’s temperature
by two degrees. Surely this is not a sustainable technology, especially given our
current, ever-worsening climate crisis. That’s not to say that blockchain technology is
inherently bad; there are some theoretical applications of blockchain technology that
may actually help the environment. A 2018 World Economic Forum report identified a
number of ways that blockchain technology could power solutions to mitigate the
climate crisis, including managing transparent supply chains. However, these and other
proposed solutions do not directly address the incredibly high energy costs of crypto
mining. Scholars argue that bitcoin emissions alone could raise the Earth’s temperature
by two degrees. There have also been some suggestions for partial fixes to the energy
drain. Many NFTs exist on the Ethereum blockchain, one of the largest crypto platforms
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currently in existence. The platform has promised to shift to a less energy-intensive
standard for validating transactions, moving from a “proof of work” standard to a “proof
of stake” standard. Unlike the current “proof of work” standard, which relies on
computers racing to solve complex puzzles as “proof” to verify transactions and add
blocks to the chain, a “proof of stake” standard would instead require a selection of
users to “prove their stake” (show ownership of the currency) in order for any user to
add blocks to the chain. This would, at least theoretically, lower the amount of energy
needed for each transaction. At least one NFT market, NBA’s TopShot, a platform for
trading NBA highlight clips as NFTs, already runs on a “proof of stake” system. There
may be a potentially less planet-destroying path forward for NFTs, and for blockchain
generally, but as things stand, the positive economic benefits do not outweigh the
drastic long-term environmental damages. As such, the major players need to radically
change the way the crypto community operates. In lieu of a massive sea change in
private regulation (which is frankly unlikely to ever happen), government regulators
around the world must take greater notice of blockchain technologies and crypto
markets. Congress should hold hearings on blockchain’s environmental impact as soon
as possible, and grill large platforms to account for how they plan to mitigate the
environmental harm caused by crypto mining.
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CON: Courts
Argument: Regulation would overburden courts
Uniqueness: Courts are opening now post Covid but clog is increasing. It’s on the brink.
Monica Asher, National Law Review, 10-9-2021 ["COVID Recovery In The Courts: What
To Expect As Courts Adapt To The New Normal",
https://www.natlawreview.com/article/covid-recovery-courts-what-to-expectcourts-adapt-to-new-normal, 10-9-2021] Srikar T. S.
ILLINOIS: As most of Illinois (outside of Chicago) began a staged reopening on May 29,
2020, the Illinois Supreme Court has ordered that “Effective June 1, 2020, the Court’s
order of March 17, 2020, is modified so that each circuit may return to hearing court
matters, whether in person or remotely, according to a schedule to be adopted for
each county by the chief judge in each circuit. The circuit courts shall continue, to the
extent possible, to allow for appropriate social distancing and attempt to reduce the
number of persons appearing personally for court appearances.” (Illinois Supreme Court
Order M.R. 30370, entered May 20, 2020.) As of June 1, 2020, each of the 24 Illinois
Circuit Courts is issuing its own orders regarding procedures for reopening courtrooms.
These orders vary widely. For example: On May 28, 2020, the chief judge of the Circuit
Court of Cook County issued an amendment to General Administrative Order 2020-01
extending the closure of almost all civil courtrooms until July 6, 2020. Pursuant to G.A.O.
2020-01, hearings in almost all civil matters scheduled prior to July 6 are continued at
least 30 days (to a date not more than 30 days after July 6); the Circuit Court of Cook
County has limited ability to hold remote hearings by video or telephone conference. Efiling is required (as it was prior to the pandemic), and filing deadlines are not extended.
By contrast, on the same day, the chief judge of the Circuit Court for the 3rd Circuit in
southern Illinois (Madison and Bond Counties) issued Administrative Order 2020-M-14
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reopening all courtrooms “for limited court business” effective June 1, 2020. Everyone
entering the courthouse is required to wear a mask, and each courtroom will operate on
a separate schedule set by the respective judge. The three US District Courts in Illinois
each have their own orders governing practice and procedures during the pandemic;
none of them have reopened their courthouses for non-emergency civil cases. In the
Northern District, the Fourth Amended General Order 20-0012 issued May 26, 2020,
directs that civil hearings are to be conducted remotely, by video or telephone
conference, through July 15, 2020, and no civil jury trials will be conducted before
August 3, 2020. In the Central District, Third Amended General Order 20-01 extends the
closure of courthouses through June 15, 2020, while in the Southern District,
courthouses will remain closed except for special settings through July 5. Unlike some of
the previous orders in the US District Courts, none of the latest orders extend filing or
other deadlines in civil cases. None of the District Courts in Illinois have released plans
for a general reopening of their courthouses. NEW YORK: New York state courts began
the pandemic closed, except for essential applications, and are slowly opening back
up, each in different ways and at a different pace. Litigants can now e-file documents,
including to commence new cases, which they could not do previously. For cases
commenced pre-COVID, case management depends largely on the court, the case and
the judge. However, generally speaking, response deadlines are stayed in the lower
courts. Statutes of limitations remain tolled by Executive Order. Courts have been
holding appearances, including oral arguments, by video, with increasing frequency,
though pre-scheduled routine appearances are often adjourned sine die, unless
specifically requested by a party. Many courthouses are beginning to open for inperson operations, depending on the region and in accordance with Governor
Cuomo’s phased reopening plan. The reopening of electronic filing led to a heavy
influx of new cases and other filings, which created an immediate backlog, but
resulting delays may be minimized by the fact that the courts used the “time out” to
clear the pre-COVID case backlog.
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Link: the SEC regulates through suits enforced by the courts – affirming means more cases.
SEC, No Publication, 9-1-2021 ["SEC.gov", https://www.sec.gov/news/pressrelease/2021-172, 10-9-2021] Srikar T. S.
The Securities and Exchange Commission announced today that it has filed an action
against BitConnect, an online crypto lending platform, its founder Satish Kumbhani,
and its top U.S. promoter and his affiliated company, alleging that they defrauded retail
investors out of $2 billion through a global fraudulent and unregistered offering of
investments into a program involving digital assets. According to the SEC's complaint,
filed in the United States District Court for the Southern District of New York, from
early 2017 through January 2018, Defendants conducted a fraudulent and unregistered
offering and sale of securities in the form of investments in a "Lending Program" offered
by BitConnect. The complaint alleges that, to induce investors to deposit funds into the
purported Lending Program, Defendants falsely represented, among other things, that
BitConnect would deploy its purportedly proprietary "volatility software trading bot"
that, using investors' deposits, would generate exorbitantly high returns. However,
the SEC alleges that instead of deploying investor funds for trading with the purported
trading bot, defendants BitConnect and Kumbhani siphoned investors' funds off for
their own benefit by transferring those funds to digital wallet addresses controlled by
them, their top promoter in the U.S., defendant Glenn Arcaro, and others. The SEC's
complaint further alleges that BitConnect and Kumbhani established a network of
promoters around the world, and rewarded them for their promotional efforts and
outreach by paying commissions, a substantial portion of which they concealed from
investors. According to the complaint, among these promoters was Arcaro, the lead
national promoter of BitConnect for the United States who used the website he created,
Future Money, to lure investors into the Lending Program. "We allege that these
defendants stole billions of dollars from retail investors around the world by exploiting
their interest in digital assets," said Lara Shalov Mehraban, Associate Regional Director
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of SEC's New York Regional Office. "We will aggressively pursue and hold accountable
those who engage in misconduct in the digital asset space." The SEC's complaint
charges Defendants with violating the antifraud and registration provisions of the
federal securities laws. The complaint seeks injunctive relief, disgorgement plus
interest, and civil penalties. The SEC previously reached settlements with two of the
five individuals it charged in a related action for promoting the BitConnect offering. In a
parallel action, the Department of Justice today announced that Arcaro has pleaded
guilty to criminal charges. The SEC's investigation was conducted by Gwen Licardo of the
SEC's Retail Strategy Task Force, Michael Baker and Pamela Sawhney of the SEC's Cyber
Unit, and Jorge Tenreiro and Jordan Baker of the SEC's New York Regional Office. The
case was supervised by John O. Enright, Ms. Mehraban and Kristina Littman, Chief of the
Cyber Unit. The litigation is being conducted by Mark Sylvester, Richard Primoff, Ms.
Licardo, Mr. Baker, and Ms. Sawhney. The Commission appreciates the assistance of the
Cayman Islands Monetary Authority, the Hong Kong Securities and Futures Commission,
the Monetary Authority of Singapore, the Ontario Securities Commission, the Romanian
Financial Supervisory Authority, and the Thailand Securities and Exchange Commission.
The SEC's Office of Investor Education and Advocacy and Enforcement's Retail Strategy
Task Force has issued an Investor Alert on Digital Asset and Crypto Investment. Investors
can find additional information about digital asset and "crypto" investment schemes,
including the warning signs of fraud, at Investor.gov.
Impact: God impact card, kills innovation, free criminals, decrease labour efficiency.
Lori Scialabba, Deloitte Insights, 5-6-2019 ["Government backlog reduction",
https://www2.deloitte.com/us/en/insights/industry/public-sector/governmentbacklog-reduction.html, 10-9-2021] Srikar T. S.
Agencies often struggle to get the funding needed to fix their backlogs. After all, a
backlog is an annoyance, but is it really worth the effort to solve it? The problem with
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this thinking is it ignores the opportunity costs of a backlog, which can be significant
for individuals, communities, and businesses. For example, the US security clearance
backlog, which peaked at over 700,000 cases in 2018, is a backlog with high
opportunity costs. Each clearance case represents an individual who needs access to
classified information to do the job right—but instead is unable to do so, or worse, is
simply waiting for clearance to be employed. According to a 2018 survey of cleared
personnel, jobs that required clearance had an average salary of about US$93,000. The
downstream effects of the backlog—in employment terms alone—are felt in lost labor
market efficiency, forgone income, and reduced tax revenues (not to mention the
mission impact of a shortage of qualified and cleared personnel). Many states face
backlogs in everything from human services to examining criminal evidence. With some
states facing a serious epidemic of opioid and related drug abuse, a drug-evidence
testing backlog can mean delayed justice, which means police could release known drug
dealers while they wait on evidence. That means more dealers and traffickers on the
street, and more damage to communities. The effects on communities can exacerbate
backlogs in other state systems—from children in foster care to state and local court
systems to elder care. And government backlogs can reduce the attractiveness of
investment and innovation in entire economies. Backlogs in court systems, for example,
can deter economic investment by increasing risk, especially for foreign investors, and by
enabling anti-competitive behavior, such as bogging down competitors in endless
lawsuits or violating agreements with impunity. Backlogs in developing economies in
Asia, for example, are soaring, with downstream effects for justice, growth, and longterm development. They can harm developed economies too: By one estimate, Italy’s
justice backlog reduces GDP growth by 1 percent annually. Backlogs can also hinder
innovation. Studies by the Center for the Protection of Intellectual Property have found
that each year of patent delay can reduce a startup’s employment by 21 percent and
sales growth by 28 percent over the five years after approval. Patent backlogs can
decrease the payoff for R&D, reducing technology progress: For example, backlogs in
three top patent offices led to more than US$10 billion in reduced global growth each
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year. Backlogs can also reduce citizen satisfaction, and in turn, confidence in
government. Trust in government today is at historic lows, with only 18 percent of
Americans surveyed saying they trust government to do the right thing all or most of the
time. For many citizens, case-processing systems are where they encounter
government, whether at the registry for motor vehicles, in applying for benefits, or
getting permits for their homes or businesses. Long wait times and poor customer
experience can further erode confidence in government—no one’s desired outcome.
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CON: Regulation is risky
Argument: Regulation is always risky because it trades off with innovation and profit seeking.
This argument is a more high-altitude analysis of how the administrative state hurts nascent
enterprises.
Warrant: There are tons of federal regulations
Edwards, C. (2021, May 5). Entrepreneurs and Regulations: Removing State and Local
Barriers to New Businesses. Cato Institute. https://www.cato.org/policyanalysis/entrepreneurs-regulations-removing-state-local-barriers-newbusinesses#regulations-businesses
“Governments impose various sorts of regulations on businesses. Some regulations
are imposed across all industries, such as rules related to labor, accounting, safety,
environment, and advertising. Other regulations are specific to industries, such as
agriculture, energy, transportation, and financial services. Regulations are rules that
require actions or that restrict or ban actions. To comply with regulations, companies
must spend on equipment and procedures, must pay wages and benefits set by
government rules, and must hire experts to navigate all the rules. Regulations
consume the time and energies of business leaders, and they create barriers to
innovation and competition. Many regulations create benefits, but those benefits
should be considered against all the costs they entail. The federal government imposes
regulations on businesses related to occupational health and safety, environment,
wages and overtime, health and retirement benefits, family leave, workplace
harassment and discrimination, disability, immigration and employment eligibility, labor
unions, privacy, antitrust, truth in advertising, foreign trade, and many other areas. The
federal government imposes further regulations on specific industries. It has about 260
agencies that impose regulations, and there is overlap between the rules.49 A startup
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with a new health app for smartphones, for example, may have to deal with regulations
from four different federal agencies.50”
Warrant: Regulations are a major impediment to business activity
Edwards, C. (2021, May 5). Entrepreneurs and Regulations: Removing State and Local
Barriers to New Businesses. Cato Institute. https://www.cato.org/policyanalysis/entrepreneurs-regulations-removing-state-local-barriers-newbusinesses#regulations-businesses
“How important are regulations to small businesses? In a March 2020 survey, the
National Federation of Independent Business (NFIB) asked small business owners to rate
the importance of 75 different economic issues for their firms. After the cost of health
insurance, finding and retaining good employees, and taxes, the biggest issue was
“unreasonable government regulations.”55 The organization’s surveys since the 1980s
consistently find that regulations are one of the “most important problems” faced by
small businesses.56 Regular polls by CNBC also show that regulations are a top concern
of small businesses. In the fourth quarter of 2020, small business confidence plunged
to the lowest level since 2017.57 When asked which factors will have a negative effect
over the next year, 49 percent of small business respondents said government
regulations, which is up from 26 percent in the first quarter of 2020.58 The shutdowns
and restrictions of 2020 appear to have increased fears of government regulatory
power.”
Warrant: Regulations make scaling businesses hard
Edwards, C. (2021, May 5). Entrepreneurs and Regulations: Removing State and Local
Barriers to New Businesses. Cato Institute. https://www.cato.org/policy-
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analysis/entrepreneurs-regulations-removing-state-local-barriers-newbusinesses#regulations-businesses
“The second regulatory disadvantage for startups is economies of scale in compliance.
To launch a startup, entrepreneurs need to learn an array of general business
regulations as well as regulations specific to their industry. They do not have in-house
experts to guide them, as large firms do. Regulations may require investments in
machinery, business processes, and compliance officers. Large firms can spread such
costs of compliance across a greater volume of sales. In a study for the National
Association of Manufacturers, economists Mark Crain and Nicole Crain measured
regulatory economies of scale. For businesses of different sizes, they estimated the
costs of federal regulations, including economic, tax code, environmental, health and
safety, and homeland security regulations. They found that the per employee costs for
small businesses (less than 50 employees) were 29 percent higher, on average, than
the costs for large businesses (more than 100 employees).67 In manufacturing, they
found that the per employee regulatory costs for small businesses were 152 percent
higher than the costs for large businesses.68 A 2017 Chamber of Commerce study
echoed these findings of relatively higher regulatory costs on smaller firms.69.”
Warrant: Regulation empirically hurts businesses as they scale
Aghion, P. (2021, February 3). Does regulation affect innovation? Study shows it does,
but there is a way out. ThePrint. https://theprint.in/opinion/does-regulationaffect-innovation-study-shows-it-does-but-there-is-a-way-out/597700/
““Discouraging productive firms from becoming larger is one “static” effect of the
regulation. However, a deeper, more dynamic problem might be that firms may be
reluctant to invest in growth-enhancing innovations when they face these higher
regulatory taxes. Furthermore, even larger firms face this tax on growth, so they might
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invest less in research and development (R&D). Figure 2 shows that these innovation
effects might be happening in the data. The probability of innovating increases with firm
size, but there is an “innovation valley” just before 50 employee firms consistent with a
discouraging effect. Moreover, the gradient of the innovation-size relationship flattens
after 50 employees, also suggesting a regulatory tax..”
Analysis: This argument is essential for the higher-level theoretical debate about the impact of
regulation. If you can paint a convincing picture about the effect of regulation writ large then
you will also have a convincing stance on regulation in the form of crypto
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CON: Regulation is politically toxic
Argument: Politics is a game of finite resources, tough tradeoffs and hard choices. In a
constrained environment the government should not burn political capital on divisive crypto
regulations.
Warrant: There is a tension between innovation and regulation
Livni, E. (2021, August 2). What’s Next for Crypto Regulation. The New York Times.
https://www.nytimes.com/2021/01/30/business/dealbook/crypto-regulationblockchain.html
“There is a lot going on in crypto right now. Some say too much, too fast. Others
complain that the United States is too slow, falling behind because its rules are
outdated and unfit to address the inventions that blockchain technology has created.
But markets and regulators have been here before. “The basic, overarching issue is
that digital asset innovation has outpaced our regulatory framework,” said Timothy
Massad of Harvard, who is formerly the chairman of the Commodity Futures Trading
Commission and has written extensively about crypto asset oversight. “That’s not
unusual. There’s always a tension between innovation and regulation.” It is not
problematic, he said, unless regulators wait for a crisis and then respond in a rush,
which they often do. “Regulation won’t stop innovation,” Mr. Massad said, “unless it’s
done badly.”.”
Warrant: There are many overlapping definitions which make crypto regulations hard to define
Livni, E. (2021, August 2). What’s Next for Crypto Regulation. The New York Times.
https://www.nytimes.com/2021/01/30/business/dealbook/crypto-regulationblockchain.html
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“Are cryptocurrencies commodities or securities? “It’s a moving target,” he said of one
the biggest debates among crypto regulators (more on that below). In a “broad sense
of what the S.E.C. is trying to accomplish,” he said, consider this: “Whenever you’re
thinking about public policy, folks like myself who once was a regulator, we think in
the ‘duck test.’ And then we secondarily think about the actual words in the
congressional act. Where is the common sense? And if it quacks and walks like a duck,
it’s probably a security.” Regulators deal with start-ups and incumbents in different
ways. In the fintech world, new challengers “take risks and beg for forgiveness,
whereas incumbents tend to have to ask for permission,” Mr. Gensler said. This creates
an “unlevel field,” but “I’m not crying for JPMorgan,” he added. “The big incumbents,
they have their advantages.”.”
Warrant: There are large gaps in policy expertise
Werschekel, B. (2021). Lack of Crypto Knowledge in Congress. Yahoo Finance.
https://news.yahoo.com/congressman-most-of-my-colleagues-dont-have-adeep-understanding-of-cryptocurrencies-192630884.html?\
“With the incredible volatility in cryptocurrency markets in recent weeks, lawmakers
might be watching the price moves like everyone else, but aren’t likely to act anytime
soon, predicts one Representative. “Most of my colleagues don't have a deep
understanding of cryptocurrencies,” Rep. Jim Himes (D., Conn.) said diplomatically in
an interview with Yahoo Finance Friday. “So, for better or for worse, there's not going
to be legislation passed out of the United States Congress anytime soon,” he said.
Himes likely has one of the best grasps of the ins and outs of cryptocurrency on Capitol
Hill. In addition to being a current member of the House Financial Services committee,
the Connecticut Congressman (whose district includes towns like Greenwich, arguably
the U.S. hedge fund capital) was a Rhodes Scholar and worked at Goldman Sachs for 12
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years. He rose to the head the bank’s telecommunications technology group before
entering politics.”
Warrant: Crypto spans across asset classes
Werschekel, B. (2021). Lack of Crypto Knowledge in Congress. Yahoo Finance.
https://news.yahoo.com/congressman-most-of-my-colleagues-dont-have-adeep-understanding-of-cryptocurrencies-192630884.html?\
““The latter part of 2021 and early 2022 could be a turning point for cryptocurrencies
around the world. Regulators have cryptocurrencies on their agenda as a key priority,"
wrote Deutsche Bank analyst Marion LaBoure in a recent research note. Himes says
many lawmakers are still at the point of asking whether cryptocurrency is even a good
thing. “What does it actually do? What problem does it solve?” Himes said of the
questions his colleagues are asking. “I'm just telling you that that's the sort of general
atmosphere in the Congress where people are saying, you know, tell me again, what's
good about cryptocurrency?” Lawmakers in both the House and Senate have raised a
host of questions about cryptocurrency in recent months. During a recent interview,
Sen. Elizabeth Warren (D., Mass.) asked whether bitcoin takes advantage of smaller
investors, whether they are too easy to steal, and added “I think there's a real issue
about the environmental impact” of cryptocurrency mining.”
Analysis: This argument is useful for showing that no matter how well intentioned regulations
are, they will be designed by people knowing little about crypto. This should de-link most pro
arguments which rest on the assumption of well-designed regulations.
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CON: Crypto is too heterogeneous
Argument: Crypto is too diverse for regulation, it is a massive category of dissimilar assets.
Much like cars and airplanes are different and cannot be regulated in the same way, so too are
crypto.
Warrant: There are many types of cryptocurrencies
Rossolillo, N. (2021, September 17). Types of Cryptocurrency. The Motley Fool.
https://www.fool.com/investing/stock-market/marketsectors/financials/cryptocurrency-stocks/types-of-cryptocurrencies/
“Blockchain technology is open source, meaning any software developer can use the
original source code and create something new with it. Developers have done just
that. There are estimated to be more than 4,500 different cryptocurrencies in
circulation as of this writing, and the figure keeps increasing. For reference, it was only
about four years ago that the number of cryptos surpassed 1,000. Part of the reason
for the surge is the relative ease with which new cryptocurrencies can be created. The
source code of one can be used to build another. For example, the Ethereum
(CRYPTO:ETC) network can be used to create your own personal digital coins. And
sometimes there are "forks" in the software code that change the rules about how a
crypto is governed, which can lead to the creation of a new crypto. Bitcoin Cash
(CRYPTO:BCH) was created in 2017 as a result of a Bitcoin fork allowing for more
transactions to be recorded on a single block of the blockchain.”
Warrant: As the crypto market grows there will be even more types of cryptocurrencies
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Rossolillo, N. (2021, September 17). Types of Cryptocurrency. The Motley Fool.
https://www.fool.com/investing/stock-market/marketsectors/financials/cryptocurrency-stocks/types-of-cryptocurrencies/
“Surging crypto prices have led many developers to pile in to try and get a cut of the
action. And blockchain technology has usefulness beyond just digital currencies (more
on that in a minute). Thus, while some cryptos might be a bubble that will eventually
pop, the decentralized nature of the technology and the broad scope of how it can be
applied in the software world is in itself a reason why there are so many cryptos.
Bitcoin is considered the first cryptocurrency created, and everything else is collectively
known as an "altcoin" (a combo word derived from "alternative coin"). While it's difficult
to say which cryptos are the best ones, Bitcoin and some of the largest altcoins out
there are top-tier options because of their scalability, privacy, and the scope of
functionality they support.”
Warrant: It is hard to classify all of the different crypto assets
Leedham, R. (2021, May 14). We need to ban Bitcoin now. Before it burns the world up.
British GQ. https://www.gq-magazine.co.uk/lifestyle/article/bitcoin-ban
“The challenge for regulators lies in properly classifying the range of cryptocurrencies
that exists. Many analysts argue that cryptocurrencies represent an entirely new asset
class. This classification may be true of tokens that function like securities, but it is
clearly true of so-called utility tokens. Broadly speaking, utility tokens are defined as
having some utility apart from or in addition to their value as an investment. The main
argument supporting utility tokens is that they do not qualify as securities under the
Howey test because they do not qualify as a common enterprise based upon an
expectation of profits from the efforts of others.”
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Warrant: Crypto spans across asset classes
Leedham, R. (2021, May 14). We need to ban Bitcoin now. Before it burns the world up.
British GQ. https://www.gq-magazine.co.uk/lifestyle/article/bitcoin-ban
“The problem with strictly classifying all tokens as securities is that they can
simultaneously function across multiple categories: as currencies, as instruments for
betting or voting, or as traditional securities. In fact, multiple agencies view
cryptocurrencies differently. Although some regulatory agencies define
cryptocurrencies as monetary equivalents, others define them as digital goods or
commodities, or even taxable property. To be sure, a global legal vacuum exists around
cryptocurrencies because they do not always precisely fit the traditional definition of an
“investment contract”.”
Warrant: America’s regulatory schemes are too tied to old laws
Leedham, R. (2021, May 14). We need to ban Bitcoin now. Before it burns the world up.
British GQ. https://www.gq-magazine.co.uk/lifestyle/article/bitcoin-ban
“Despite attempts at regulation offered by governments around the world, the rise of
cryptocurrencies remains a problem. The U.S. approach to regulating the industry has
been to work with its current laws rather than introduce new ones. This approach has
been arguably short-sighted. The vacuum in effective regulation has ensured that
market manipulation remains a very real risk. Without some degree of protection for
investors, for example, this has meant that institutional investors remain on the
sidelines, limiting the size of the market.”
Analysis: This argument is strong because it shows practical difficulties of regulating cryptos.
How can we design effective regulations if we lack the conceptual framework to classify crypto
assets?
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CON: Crypto should be outright banned, not regulated
Argument: Crypto should be banned, not regulated. A ban would be the only way to solve the
issues with crypto.
Warrant: Crypto is behind cybercrime
Manning, R. O. A. C. (2021, July 25). Bye-bye, bitcoin: It’s time to ban cryptocurrencies.
TheHill. https://thehill.com/opinion/cybersecurity/564696-bye-bye-bitcoin-timeto-ban-crypto-currencies
“I’ve never quite understood why cryptocurrencies are worth anything. Of course, the
untraceable payments are worth a lot to ransomware hackers, cyber criminals and
money launderers. But dollars, euros and yen are backed by nations’ respective
treasuries. If someone invents a cryptocurrency, any value is based solely on convincing
others it has value. But is it a usable means of exchange? International banking officials
say cryptocurrencies such as bitcoin are speculative assets, not sustainable, usable
money. Yet the epidemic of hugely disruptive ransomware attacks in recent months —
on JBS Foods, a major meat processor; on Colonial Pipelines, our critical infrastructure,
causing gasoline shortages for weeks; and on 1,000 or more U.S. businesses on July 4
— highlights the enormous risks. Moreover, hundreds of small towns, hospitals,
school districts and small businesses have been hit by the ransomware epidemic — all
enabled by cryptocurrencies. How should governments respond? Besieged with
cyberattacks, the Biden administration has been struggling with this question of
cybersecurity with few clear answers. Cyber offense still seems to beat cyber
defense.”
Warrant: Modern states do not need cryptocurrencies
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Manning, R. O. A. C. (2021, July 25). Bye-bye, bitcoin: It’s time to ban cryptocurrencies.
TheHill. https://thehill.com/opinion/cybersecurity/564696-bye-bye-bitcoin-timeto-ban-crypto-currencies
“How should governments respond? Besieged with cyberattacks, the Biden
administration has been struggling with this question of cybersecurity with few clear
answers. Cyber offense still seems to beat cyber defense. As the eminent economic
analyst Martin Wolf outlined in a recent Financial Times essay, the risks and chaos of a
wild world of unstable private money is a libertarian fantasy. According to a recent
Federal Reserve paper, there are already some 8,000 cryptocurrencies. It’s a new
mom-and-pop cottage industry. How should governments respond? Wolf argues that
central banks (e.g., the U.S. Federal Reserve) should create their own official digital
currencies — central bank digital currencies (CBDC) and make cryptocurrencies illegal.
I’ve been asking the same question: Who needs cryptocurrencies? Apart from the
nasty uses and wild speculative value swings, data mining to produce bitcoin is a
serious environmental hazard, using huge amounts of electricity by rows and rows of
computers.”
Warrant: Crypto is bad for the environment
Leedham, R. (2021, May 14). We need to ban Bitcoin now. Before it burns the world up.
British GQ. https://www.gq-magazine.co.uk/lifestyle/article/bitcoin-ban
“Where once Bitcoin was a funny internet curio, it is now legitimately a big deal, albeit
a big deal that answers to no one and has zero regard for the consequences of its own
actions. Case in point: Bitcoin mining – the process by which transactions are
legitimised and monitored – already consumes more electricity in a year than Sweden
or Ukraine, according to the University Of Cambridge’s Centre For Alternative Finance.
The real kicker? “At the moment, only about a fifth of the electricity used in the world’s
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data centres comes from renewable sources,” Rolf Skar, special projects manager at
Greenpeace USA, tells me. “And that’s not good enough.” So the more Bitcoin grows in
value, the more its already massive carbon footprint is going to mushroom. Other
cryptocurrencies, such as its chief competitor, Ethereum, either use or are
transitioning to a significantly less energy-intensive certification process called “proofof-stake”. Bitcoin could do the same, but has little incentive to do so.”
Warrant: Cypto is financially unstable
Leedham, R. (2021, May 14). We need to ban Bitcoin now. Before it burns the world up.
British GQ. https://www.gq-magazine.co.uk/lifestyle/article/bitcoin-ban
“Disregarding Bitcoin’s environmental impact and its criminal underbelly, you might
just look at the tenor of its news coverage and see a chance to make a quick buck. And
there’s the rub: that precise ethos is the only thing sustaining Bitcoin. But don’t take my
word for it. Craig Wright, Bitcoin’s claimed founder, said so himself to the Times: “The
price goes up because people are paying... but that doesn’t ever last forever. Old
Charles Ponzi did that one too.” The closest parallel to what a Bitcoin collapse would
look like is a smaller-scale version of the subprime mortgage crisis. You know, that
grand old time in 2007 when a bunch of genius bankers realised the debt-related
assets they owned had no real-world utility and were vastly less valuable than
previously assumed. And if the currency does find a way to stick around for the long
haul? Then the world’s central banks will have their means to prop up their economies
in a recession via stimulus considerably restricted.”
Warrant: Bitcoin will either collapse, or its carbon footprint will grow
Leedham, R. (2021, May 14). We need to ban Bitcoin now. Before it burns the world up.
British GQ. https://www.gq-magazine.co.uk/lifestyle/article/bitcoin-ban
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“The upshot of all of this is that Bitcoin represents a real Sophie’s choice for humanity
at large. Either it’s increasingly legitimised by corporations and financial institutions
while the world suffers the environmental consequences or its pyramid scheme-like
tendencies fail to resolve themselves and a large number of people (and crooks) lose
themselves a whole lot of money. It’s late-stage capitalism in a microcosm: either the
one per cent win or everyone loses. Given that dilemma and the fact that governments
aren’t even getting a cut of the upside at present, it’s hard to see how Bitcoin isn’t
operating on borrowed time before increased regulation or some kind of ban comes
into effect, especially since doing so would give nations the space to introduce their own
CBDCs (central bank digital currencies) for greater control, plus unprecedented real-time
spending and savings data to inform their own fiscal policy. The real question for Bitcoin
is how much damage will it wreak before that happens – and can it survive the
aftermath?”
Analysis: This argument is strong because it shows that mere regulation is not enough. Crypto
is bad by its very nature and the only solution would be a complete and total ban.
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CON: Regulation will be ineffective
Argument: The novelty and decentralization of cryptocurrencies makes it very difficult to
regulate them effectively
Warrant: It is hard to draw lines around crypto assets
Kolhatkar, S. (2021, October 6). The Challenges of Regulating Cryptocurrency. The New
Yorker. https://www.newyorker.com/business/currency/the-challenges-ofregulating-cryptocurrency
“One securities lawyer I spoke with, Nick Morgan, who is a partner at Paul Hastings,
recalled that, around 2017, as a frenzy of initial coin offerings—a fund-raising strategy
for cryptocurrency that resembles an I.P.O.—was in full swing, a client came to his law
firm wanting to know what the S.E.C. thought about I.C.O.s, and whether the agency
considered digital coins to be under its purview. Morgan said, jokingly, that his first
question was, “What’s an I.C.O.?” He quickly learned that there was little S.E.C.
guidance available. “What would be useful for everyone to know is, what are the
characteristics of a digital asset that is not a security? It would be useful to draw that
line,” Morgan said. “I was a little hopeful, given Gensler’s technical background, that
he might be the person to say, ‘Here is the boundary of the S.E.C.’s jurisdiction, and if
you designed a token this way, that would be outside our jurisdiction.’ ” But, he
added, “I don’t think it’s going to happen.””
Warrant: The SEC has been unclear and confusing
Kolhatkar, S. (2021, October 6). The Challenges of Regulating Cryptocurrency. The New
Yorker. https://www.newyorker.com/business/currency/the-challenges-ofregulating-cryptocurrency
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“More recently, the S.E.C. has expressed interest in the workings of Coinbase, one of the
largest cryptocurrency exchanges, where people can buy and sell cryptocurrencies.
Coinbase went public earlier this year, and in June it announced plans for a product it
called Lend, which would have enabled owners of cryptocurrencies to loan them out
and be paid interest on the loans. On September 7th, Coinbase announced in a blog post
that the S.E.C. had threatened to sue the company over Lend, alleging, the post said,
that the offering involved a security. According to the company, its executives had
been “proactively engaging” with the S.E.C. for six months, to clarify the legal standing
of its projects, but it “didn’t get much of a response.” It also said that the S.E.C. had so
far refused to clarify whether it considered the act of lending cryptocurrency a
security, or whether the cryptocurrency itself was the security, and any other aspects
of its reasoning. (The S.E.C. said that it could not comment on issues involving specific
companies.) On September 17th, Coinbase announced that it was cancelling the Lend
program.
Warrant: The US regulatory environment will have trouble with crypto
Silverman, G. (2021, July 17). Why US regulation is failing the cryptocurrency test.
Financial Times. https://www.ft.com/content/e196014a-c5bc-4b2e-84555b5b8d878209
“The underlying difficulty is that US financial regulation is fragmented. There are
multiple federal banking and market authorities, with overlapping jurisdictions, plus
state regulatory systems. As Jamie Dimon, JPMorgan Chase’s chief executive, put it in
his annual letter to shareholders: “There is no one real authority that can co-ordinate
all the moving parts and bridge differences.” In the long run, this is not entirely a bad
thing. Checks and balances are as American as apple pie or junk bonds; having so many
regulators serves as protection against any one of them messing up. But this system has
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its weaknesses. New products that are neither fish nor fowl in a regulatory sense can
fall through the cracks. Crypto is hard to regulate because it is hard to define. While
true believers call cryptos currencies, US regulators view them differently. Bitcoin, for
instance, has been deemed a commodity. Other cryptos are seen as securities..”
Warrant: No agency has the authority or remit to regulate crypto
Silverman, G. (2021, July 17). Why US regulation is failing the cryptocurrency test.
Financial Times. https://www.ft.com/content/e196014a-c5bc-4b2e-84555b5b8d878209
“This resulting confusion helps explain why neither the SEC nor the Commodity
Futures Trading Commission is directly regulating crypto exchanges such as Coinbase.
No one has given them the job — a source of frustration for the regulators.
Congress, in its fashion, is on the case. Elizabeth Warren, the Democratic senator, wrote
to Gensler this month to ask whether the SEC “has the proper authority to close existing
gaps in regulation that leave investors and consumers vulnerable to dangers in this
highly opaque and volatile market”. Gensler’s response, due by July 28, will undoubtedly
be persuasive. But whether it will prod legislators to act quickly is another matter. If
history is any guide, Congress will wait for things to fall apart before deciding how
they should have been put together in the first place.”
Warrant: Administrative responses most often have to wait for a major crisis
Silverman, G. (2021, July 17). Why US regulation is failing the cryptocurrency test.
Financial Times. https://www.ft.com/content/e196014a-c5bc-4b2e-84555b5b8d878209
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“The resulting impasse is exacerbating anxieties that regulators are falling further
behind the curve. The crypto craze reminds many Wall Street veterans of the
unregulated rise of credit default swaps in years leading to the financial crisis. Like
crypto, CDS were hard to characterise, being a form of insurance that was not
regulated as such, and were seen by their advocates as being too cool to be overseen
by mere bureaucrats. “It took a crisis to focus our attention on products like CDS,” said
Sarah Hammer, managing director of the Stevens Center for Innovation in Finance at
the University of Pennsylvania’s Wharton School. “In some ways, crypto is more
challenging than derivatives because it falls into many different regulatory laps.”.”
Analysis: This argument is strong because it shows the realistic conclusion of regulation.
Perhaps in theory regulation is a good thing but in practice it would never work out to design a
genuinely effective program.
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CON: Unjust taxation
Argument: Cryptocurrencies will become harder to track if they’re taxed
Warrant: Taxing cryptocurrency exchanges will push investors to decentralized exchanges that
are more difficult to track
“Toomey Raises Concern Over Burdensome Cryptocurrency Regulations.” United States
Committee on Banking, Housing, and Urban Affairs, 10 June 2021,
https://www.banking.senate.gov/newsroom/minority/toomey-raises-concern-overburdensome-cryptocurrency-regulations.
“In December of 2020, the Financial Crimes Enforcement Network (“FinCEN”) proposed a
rule that would impose on cryptocurrency transactions onerous recordkeeping and
reporting requirements that extend beyond existing requirements for U.S. dollar
transactions. As Ranking Member Toomey pointed out, the rule may actually prove to be
counterproductive in combatting illicit activity. “[FinCEN’s proposed rule] could cause
illicit transactions to become less traceable than they otherwise would be. By limiting
individual privacy and the ability to transact with financial institutions, the rule would
likely push bad actors to utilize methods that do not interface with financial institutions.
As a result, such cryptocurrency transactions would be less susceptible to appropriate
government oversight and detection.” Ranking Member Toomey also raised concerns
over the Financial Action Task Force’s (“FATF”) draft guidance on cryptocurrencies and
Virtual Asset Service Providers (VASPs), which would impose stringent regulatory
requirements on cryptocurrency transactions. “FATF’s guidance will drive cryptocurrency
transactions away from financial institutions, undermining the ability of law enforcement
and analytics firms to identify and track illicit activity. FATF should revise its guidance to
focus on transactions and entities that warrant regulation.””
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Warrant: Tax evasion is common and likely will not cease because of implementations.
History proves that tax evasion is common
Slemrod, Joel. “Cheating Ourselves: The Economics of Tax Evasion.” Journal of Economic
Perspectives, 2007, http://darp.lse.ac.uk/papersdb/Slemrod_(JEP07).pdf.
“No government can announce a tax system and then rely on taxpayers’ sense of duty to
remit what is owed. Some dutiful people will undoubtedly pay what they owe, but many
others will not. Over time the ranks of the dutiful will shrink, as they see how they are
being taken advantage of by the others. Thus, paying taxes must be made a legal
responsibility of citizens, with penalties attendant on noncompliance. But even in the face
of those penalties, substantial tax evasion exists—and always has. The history of taxation
is replete with episodes of evasion, often notable for their inventiveness. During the third
century, many wealthy Romans buried their jewelry or stocks of gold coin to evade the
luxury tax, and homeowners in eighteenth-century England temporarily bricked up their
fireplaces to escape notice of the hearth tax collector (Webber and Wildavsky, 1986, p.
141).”
Warrant: Tax evasion is common in the United States
Slemrod, Joel. “Cheating Ourselves: The Economics of Tax Evasion.” Journal of Economic
Perspectives, 2007, http://darp.lse.ac.uk/papersdb/Slemrod_(JEP07).pdf.
“Determining the extent of evasion is not straightforward for obvious reasons. (Would
you answer survey questions about tax evasion honestly?) Because tax evasion is both
personally sensitive and potentially incriminating, self-reports are vulnerable to
substantial underreporting (Baumeister, 1982). Moreover, the dividing line between
illegal tax evasion and legal tax avoidance is blurry. Under U.S. law, tax evasion refers to a
case in which a person, through commission of fraud, unlawfully pays less tax than the
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law mandates. Tax evasion is a criminal offense under federal and state statutes,
subjecting a person convicted to a prison sentence, a fine, or both. An overt act is
necessary to give rise to the crime of income tax evasion; therefore, the government must
show willfulness and an affirmative act intended to mislead. Some tax understatement is,
however, inadvertent error, due to ignorance of or confusion about the tax law (as is
some overpayment of taxes). Although the theoretical models of this issue generally refer
to willful understatement of tax liability, empirical analyses cannot precisely identify the
taxpayers’ intent and therefore cannot precisely separate the willful from the
inadvertent. Nor can they, in complicated areas of the tax law, precisely distinguish the
illegal from the legal. Although this review is intended to address willful tax
noncompliance, the difficulty of identifying this behavior is reflected in the varying terms
to which the analyses refer, such as “evasion,” “noncompliance,” “misreporting,” and “tax
gap.” In what follows, when discussing empirical estimates I generally use the term that
generated the estimates employed, and use the term “evasion” in discussing theoretical
treatments of willful noncompliance.”
Warrant: The resulting decrease in tax revenues collected by the IRS over the years is
substantial
Gale, William G., and Aaron Krupkin. “How Big Is the Problem of Tax Evasion?” Brookings,
Brookings, 9 Apr. 2019, https://www.brookings.edu/blog/upfront/2019/04/09/how-big-is-the-problem-of-tax-evasion/.
“The Internal Revenue Service (IRS), which is responsible for enforcing the tax rules, has
seen its funding and employment decrease. IRS funding has fallen by more than 12
percent in inflation-adjusted terms from fiscal year 2008 through fiscal year 2017, and
IRS employment dropped by more than 15 percent over the same period. The
enforcement division of the IRS has had the largest percentage decline, even as Congress
has requested the IRS to assume new administrative and enforcement responsibilities
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related to interpreting and implementing the 2017 tax overhaul, the Affordable Care Act,
the American Opportunity Tax Credit, and the Foreign Account Tax Compliance Act. In the
face of lower funding and increased responsibility, the IRS has conducted fewer audits
and provided lower-quality taxpayer service. Audit rates have fallen roughly in half over
the past two decades; the IRS audited 0.6 percent of individual returns and 1.0 percent
of corporate returns in 2017, compared to 1.0 and 2.1 percent, respectively, in 1998.
Likewise, only 38 percent of taxpayers who called the IRS received requested assistance
in 2015 as compared to 70 percent in 2011. The average telephone wait time over the
same period increased by more than 17 minutes. More generally, the IRS is falling
farther and farther behind state-of-the-art computing. Many of the computer systems
and programs are antiquated and they are using computer applications from the
1960s.”
Impact: A tax increase on crypto will stifle innovation and violate investor’s privacy
Ponciano, Jonathan. “Senate Rejects Change To New Crypto Tax Rules In $1.2 Trillion
Infrastructure Bill Despite Lawmaker, Billionaire Pushback.” Forbes, Forbes
Magazine, 10 Aug. 2021,
https://www.forbes.com/sites/jonathanponciano/2021/08/09/senate-rejectschange-to-new-crypto-tax-rules-in-12-trillion-infrastructure-bill-despite-lawmakerbillionaire-pushback/.
“Developers are the lifeblood of innovation, and subjecting them to tax reporting would
have far-reaching implications on privacy, and on the evolution of technology in this
country—not to mention, most developers would not have access to useful data [for the
IRS],” Lummis said on the Senate floor Monday. “This amendment has started the debate
on many difficult questions related to financial technology that the Senate must address
over the next few years.”
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Impact: Regulations on cryptocurrency would prevent innovation and reduce the
effectiveness of industry-led regulations that have been successful, according to the
Commissioner of the SEC
Avan-Nomayo, Osato. “Stricter Crypto Laws Will Stifle Innovation, Says SEC Commissioner
Hester Peirce.” Cointelegraph, Cointelegraph, 9 June 2021,
https://cointelegraph.com/news/stricter-crypto-laws-will-stifle-innovation-says-seccommissioner-hester-peirce.
“Hester Peirce of the United States Securities and Exchange Commission has once again
urged regulators to take a step back from attempting to overregulate the crypto space.
Speaking to Financial Times, Peirce, affectionately dubbed “Crypto Mom” due to her
positive stance on cryptocurrencies, argued against the need for strict regulatory policies.
According to Peirce, regulators by nature often have a knee-jerk reaction to emerging
market spaces, often at the expense of innovation. The SEC commissioner warned that
pursuing stricter regulatory policies eliminates the ability of market participants to carry
out peer-to-peer transactions. Rather than emphasizing government regulations, Peirce
advocates for industry-led regulatory activities. Indeed, the commissioner is a
longstanding supporter of crypto self-regulation. Back in March 2019, Peirce made the
case for crypto self-regulatory organizations in a debate with the current SEC chairman
Gary Gensler.”
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CON: Regulation will spur more dangerous alternatives
Argument: Consumers and investors will seek out coins that aren’t as easily regulated.
Warrant: Regulating cryptocurrency exchanges will push investors to decentralized exchanges
that are more difficult to track
“Toomey Raises Concern Over Burdensome Cryptocurrency Regulations.” United States
Committee on Banking, Housing, and Urban Affairs, 10 June 2021,
https://www.banking.senate.gov/newsroom/minority/toomey-raises-concern-overburdensome-cryptocurrency-regulations.
“In December of 2020, the Financial Crimes Enforcement Network (“FinCEN”) proposed a
rule that would impose on cryptocurrency transactions onerous recordkeeping and
reporting requirements that extend beyond existing requirements for U.S. dollar
transactions. As Ranking Member Toomey pointed out, the rule may actually prove to be
counterproductive in combatting illicit activity. “[FinCEN’s proposed rule] could cause
illicit transactions to become less traceable than they otherwise would be. By limiting
individual privacy and the ability to transact with financial institutions, the rule would
likely push bad actors to utilize methods that do not interface with financial institutions.
As a result, such cryptocurrency transactions would be less susceptible to appropriate
government oversight and detection.” Ranking Member Toomey also raised concerns
over the Financial Action Task Force’s (“FATF”) draft guidance on cryptocurrencies and
Virtual Asset Service Providers (VASPs), which would impose stringent regulatory
requirements on cryptocurrency transactions. “FATF’s guidance will drive cryptocurrency
transactions away from financial institutions, undermining the ability of law enforcement
and analytics firms to identify and track illicit activity. FATF should revise its guidance to
focus on transactions and entities that warrant regulation.””
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Warrant: Record keeping requirements along with regulation will push investors to
decentralized exchanges
Haig, Samuel. “Jack Dorsey Warns That FinCEN Regulations Will Drive Crypto Users
Offshore.” Cointelegraph, Cointelegraph, 5 Jan. 2021,
https://cointelegraph.com/news/jack-dorsey-warns-that-fincen-regulations-willdrive-crypto-users-offshore.
Major U.S crypto firms are rallying against FinCEN’s proposed regulations that would
force businesses operating with crypto to gather information on the identities of noncustomer counterparties. A Jan. 4 letter from Jack Dorsey, CEO of financial services firm
Square takes aim at the proposal for seeking to impose reporting obligations that go “far
beyond what is required for cash transactions,” and that Sqaure would be expected to
collect “unreliable data about people who have not opted into our service or signed up as
our customers.” “Counterparty name and address collection/reporting should not be
required for [virtual currency] CTRs or recordkeeping, as it’s not required for cash today.”
Square predicts that if passed, the law would drive cryptocurrency users toward
unregulated and non-custodial crypto services based outside of the U.S. — impacting the
nation’s global competitiveness and creating further challenges for regulators: “By adding
hurdles that push more transactions away from regulated entities like Square into noncustodial wallets and foreign jurisdictions, FinCEN will actually have less visibility into the
universe of cryptocurrency transactions than it has today.”
Warrant: Regulations would push investors towards peer-to-peer network transactions that
are less regulated
Bajpai, Prableen. “Understanding Peer-to-Peer Foreign Currency Exchange.” Investopedia,
Investopedia, 21 Sept. 2021,
https://www.investopedia.com/articles/forex/030215/understand-peertopeerforeign-currency-exchange.asp.
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“Anyone who has studied or worked, or even done business overseas has probably
come across the problem of how to exchange and send money abroad. Banks and
brokers usually charge a premium on the total amount exchanged as well as a transfer
fee. But over time, a new niche developed in the market to address this need. A new
wave of internet-based, peer-to-peer (P2P) foreign currency exchange services is cutting
banks—not to mention their fees—out of the exchange. Through an online P2P platform,
individuals can find and safely exchange currency with individuals in other countries at
much lower costs. Most online P2P companies claim to provide up to a 90% cost saving to
clients on international exchange and transfer fees. Read on to find out more about how
this part of the industry works.”
Warrant: Peer to peer transactions are decentralized and are managed my machine code as
opposed to humans
Kumar, Mudit. “Decentralized P2P Exchange Development: Compact Insights
Inside.” Blockchain.Oodles, 17 June 2021,
https://blockchain.oodles.io/blog/decentralized-p2p-crypto-exchangedevelopment/.
“Fundamentally, it is a type of crypto exchange that is exclusively controlled and managed
by software. It enables market participants to trade directly with others. It does not
necessitate the processing of all transactions by any trusted third party. Instead, smart
contract-powered escrow mechanisms ensure trusted, transparent, and efficient
transaction exchange between traders. Regular cryptocurrency exchanges act as
intermediaries between buyers and sellers. They make a profit through fee collection on
transactions. Conversely, decentralized p2p trading interactions between participants are
directed exclusively by pre-programmed software, requiring no intermediaries.
Decentralized p2p crypto trading indeed is the epitome of the philosophy of
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decentralization. Indeed, users can buy and sell crypto assets directly without an
intermediary being present on the platform for facilitating exchanges. It does not require
government legislation and authorities’ control of any sort. Instead, smart contracts
manage all tasks by fully automating them. No human interference diminishes the
overhead costs greatly.”
Impact: Peer to peer transactions help facilitate illicit activities through convertible virtual
currencies
Advisory on Illicit Activity Involving Convertible Virtual, 9 May 2019,
https://www.fincen.gov/sites/default/files/advisory/2019-05-10/FinCEN Advisory
CVC FINAL 508.pdf.
“CVCs may create illicit finance vulnerabilities due to the global nature, distributed
structure, limited transparency, and speed of the most widely utilized virtual currency
systems. New types of anonymity-enhanced CVCs have emerged that further reduce the
transparency of transactions and identities as well as obscure the source of the CVC
through the incorporation of anonymizing features, such as mixing and cryptographic
enhancements. Mixing or tumbling involves the use of mechanisms to break the
connection between an address sending CVC and the addresses receiving CVC. Some CVCs
appear to be designed with the express purpose of circumventing anti-money
laundering/countering the financing of terrorism (AML/CFT) controls. All of these factors
increase the difficulty for law enforcement and other national security agencies’ efforts to
combat money laundering, terrorist financing, and other financial crimes facilitated
through CVC.”
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CON: Worsens vulnerabilities
Argument: Regulation does little to stop hackings, and could actually increase their probability
Warrant: Vulnerability is built into the cryptocurrency system and is unsolvable by regulation.
In fact, regulation may make it worse as cryptocurrency becomes more complex
Orcutt, Mike. “Once Hailed as Unhackable, Blockchains Are Now Getting Hacked.” MIT
Technology Review, MIT Technology Review, 4 May 2021,
https://www.technologyreview.com/2019/02/19/239592/once-hailed-asunhackable-blockchains-are-now-getting-hacked/.
“But the more complex a blockchain system is, the more ways there are to make
mistakes while setting it up. Earlier this month, the company in charge of Zcash—a
cryptocurrency that uses extremely complicated math to let users transact in private—
revealed that it had secretly fixed a “subtle cryptographic flaw” accidentally baked into
the protocol. An attacker could have exploited it to make unlimited counterfeit Zcash.
Fortunately, no one seems to have actually done that. The protocol isn’t the only thing
that has to be secure. To trade cryptocurrency on your own, or run a node, you have to
run a software client, which can also contain vulnerabilities. In September, developers of
Bitcoin’s main client, called Bitcoin Core, had to scramble to fix a bug (also in secret) that
could have let attackers mint more bitcoins than the system is supposed to allow. Still,
most of the recent headline-grabbing hacks weren’t attacks on the blockchains
themselves, but on exchanges, the websites where people can buy, trade, and hold
cryptocurrencies. And many of those heists could be blamed on poor basic security
practices. That changed in January with the 51% attack against Ethereum Classic.”
Warrant: The self-regulating nature of cryptocurrency and its commerce requires that
startups are created to fight hacking and does not require government regulation
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Orcutt, Mike. “Once Hailed as Unhackable, Blockchains Are Now Getting Hacked.” MIT
Technology Review, MIT Technology Review, 4 May 2021,
https://www.technologyreview.com/2019/02/19/239592/once-hailed-asunhackable-blockchains-are-now-getting-hacked/.
“AnChain.ai is one of several recent startups created to address the blockchain hacking
threat. It uses artificial intelligence to monitor transactions and detect suspicious
activity, and it can scan smart-contract code for known vulnerabilities. Other
companies, including Tsankov’s ChainSecurity, are developing auditing services based
on an established computer science technique called formal verification. The goal is to
prove mathematically that a contract’s code will actually do what its creators intended.
These auditing tools, which have begun to emerge in the past year or so, have allowed
smart-contract creators to eliminate many of the bugs that had been “low-hanging fruit,”
says Tsankov. But the process can be expensive and time consuming. It may also be
possible to use additional smart contracts to set up blockchain-based “bug bounties.”
These would encourage people to report flaws in return for a cryptocurrency reward, says
Philip Daian, a researcher at Cornell University’s Initiative for Cryptocurrencies and
Contracts.”
Warrant: Hacking cryptocurrencies is easy for hackers because lesser known cryptocurrencies
are less protected
Orcutt, Mike. “Once Hailed as Unhackable, Blockchains Are Now Getting Hacked.” MIT
Technology Review, MIT Technology Review, 4 May 2021,
https://www.technologyreview.com/2019/02/19/239592/once-hailed-asunhackable-blockchains-are-now-getting-hacked/.
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“For popular blockchains, attempting this sort of heist is likely to be extremely expensive.
According to the website Crypto51, renting enough mining power to attack Bitcoin would
currently cost more than $260,000 per hour. But it gets much cheaper quickly as you
move down the list of the more than 1,500 cryptocurrencies out there. Slumping coin
prices make it even less expensive, since they cause miners to turn off their machines,
leaving networks with less protection.”
Impact: Defensive mechanisms to protect against hacking are expensive and time consuming
White, Bobby. “Where the Holes Are.” The Wall Street Journal, Dow Jones & Company, 10
June 2008, https://www.wsj.com/articles/SB121277691171152525.
“Hackers, it seems, can find a way to exploit every vulnerability in computer networks,
often before anyone else knows a weakness existed. For most corporate IT managers,
defending against hackers has meant throwing up firewalls around their networks to
deter intruders, patching the flaws that have been uncovered in their operating software
and loading up on protective software to guard against every known type of threat. It's an
expensive and time-consuming effort, and it still leaves companies vulnerable to the next
flaw a hacker discovers first.”
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CON: Cryptocurrencies are good for the environment
Argument: Cryptocurrencies help the Earth
Claim: Cryptocurrencies can benefit the environment
Cooling, Sam. “UN Report Says Crypto Technologies Represent 'a Limited Environmental
Impact'.” Yahoo!, Yahoo!, 8 July 2021, https://www.yahoo.com/now/un-reportsays-crypto-technologies-145935885.html.
“UN experts have stated they believe cryptocurrencies and the blockchain technology
that underpins them can play an important role in sustainable development, and may
actually benefit the environment. The United Nation’s report was commissioned in
response to the widespread environmental concerns and energy-consumption criticisms
surrounding crypto, with Bitcoin (BTC) mining taking much of the flak. The UN admitted
that “cryptocurrencies are still in their infancy, and there are still many technical and
political challenges to be overcome”. This bodes well with the report optimistic about the
future of the technologies. “The more we experiment, the more we learn about the
technology,” said Minang Acharya, a UN blockchain expert. “This is likely to improve our
UN-wide knowledge on blockchain, our understanding of the environmental and social
implications of mining operations, and improve our chances of coping with any problems
the technology may bring in the future.””
Warrant: Cryptocurrencies help the environment by making processes more transparent,
creating finance around the climate, and by creating clean energy markets
Cooling, Sam. “UN Report Says Crypto Technologies Represent 'a Limited Environmental
Impact'.” Yahoo!, Yahoo!, 8 July 2021, https://www.yahoo.com/now/un-reportsays-crypto-technologies-145935885.html.
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“The UNEP’s DTU Partnership (comprising the UNEP, the Technical University of Denmark,
and the Danish Ministry of Foreign Affairs), have stated there are three main areas where
blockchain can accelerate climate action – transparency, climate finance, and clean
energy markets. Blockchain solutions could provide a trustworthy way to show how
nations are taking action to reduce their impact on the climate. Climate financing is an
exciting use of blockchain to fight climate change, if carbon markets are scaled up then
investments that contribute to slowing the rate of climate change could be boosted,
facilitating businesses and industries to transition into low-carbon technologies. There is
also an important role for blockchain to play in accelerating the adoption of renewable
energy sources such as wind and solar power. As these sources are, by their nature,
intermittent and decentralised, new forms of energy markets are needed. Blockchain
provides a means of making these solutions marketable.”
Warrant: Proof-of-stake technology has successfully helped reduce the carbon footprint of
cryptocurrencies
Cooling, Sam. “UN Report Says Crypto Technologies Represent 'a Limited Environmental
Impact'.” Yahoo!, Yahoo!, 8 July 2021, https://www.yahoo.com/now/un-reportsays-crypto-technologies-145935885.html.
“The UN admission that blockchain and cryptocurrencies are in their infancy is right. And
as the industry continually pushes and innovates, cryptocurrencies and blockchain
technologies will become increasingly efficient in energy consumption and savings. Proof
of Stake (PoS) technology is already reducing the carbon footprint of the industry. In a
huge innovation for the industry, Ethereum 2.0 presents a move towards PoS transaction
verifications, and the Ethereum Foundation suggest this could reduce Ethereum’s
transactional energy usage by 99.5%. This follows efforts from within the community,
such as the creation of a Crypto Climate Accord in April.”
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Warrant: The carbon footprint of mining has declined substantially as a result of reduced
mining in China
Sigalos, MacKenzie. “Bitcoin Mining Isn't Nearly as Bad for the Environment as It Used to
Be, New Data Shows.” CNBC, CNBC, 20 July 2021,
https://www.cnbc.com/2021/07/20/bitcoin-mining-environmental-impact-newstudy.html.
“For years, bitcoin critics have maligned the world’s biggest cryptocurrency for polluting
the planet. But new data from Cambridge University shows that the geography of mining
has drastically changed over the last six months, and experts tell CNBC this will improve
bitcoin’s carbon footprint. China’s big crypto crackdown this spring set off a chain
reaction in the mining world. For one, it took half the world’s bitcoin miners offline
practically overnight. Fewer people mining has meant less machines running and less
power being consumed overall, which slashed bitcoin’s environmental impact. Beijing’s
new crypto rules also permanently took a lot of older and more inefficient gear offline.
And crucially, China shutting its doors to crypto mining has set off a massive migration.
Miners are now heading to the cheapest sources of energy on the planet, which more
often than not are renewable.”
Impact: Regulation discourages innovation
Avan-Nomayo, Osato. “Stricter Crypto Laws Will Stifle Innovation, Says SEC Commissioner
Hester Peirce.” Cointelegraph, Cointelegraph, 9 June 2021,
https://cointelegraph.com/news/stricter-crypto-laws-will-stifle-innovation-says-seccommissioner-hester-peirce.
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“Hester Peirce of the United States Securities and Exchange Commission has once again
urged regulators to take a step back from attempting to overregulate the crypto space.
Speaking to Financial Times, Peirce, affectionately dubbed “Crypto Mom” due to her
positive stance on cryptocurrencies, argued against the need for strict regulatory policies.
According to Peirce, regulators by nature often have a knee-jerk reaction to emerging
market spaces, often at the expense of innovation. The SEC commissioner warned that
pursuing stricter regulatory policies eliminates the ability of market participants to carry
out peer-to-peer transactions. Rather than emphasizing government regulations, Peirce
advocates for industry-led regulatory activities. Indeed, the commissioner is a
longstanding supporter of crypto self-regulation. Back in March 2019, Peirce made the
case for crypto self-regulatory organizations in a debate with the current SEC chairman
Gary Gensler.”
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CON: Centralizing cryptocurrency is dangerous
Argument: Plans to adopt a central bank currency as a means of regulation are problematic.
Warrant: Discussions of central bank digital currencies are still in speculative stages
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“Much of the discussion related to CBDCs is speculative at this point. The extent to which
a central bank could or would want to create a blockchain-enabled payment system likely
would be weighed against the consideration that these government institutions already
have trusted digital payment systems in place. Because of such considerations, the exact
form that CBDCs would take is not clear; such currencies could vary across a number of
features and characteristics. For example, it is not clear that cryptography would be
necessary to validate transactions when a trusted intermediary such as a central bank
could reliably validate them.”
Warrant: Regulations would push investors towards peer-to-peer network transactions that
are less regulated
Bajpai, Prableen. “Understanding Peer-to-Peer Foreign Currency Exchange.” Investopedia,
Investopedia, 21 Sept. 2021,
https://www.investopedia.com/articles/forex/030215/understand-peertopeerforeign-currency-exchange.asp.
“Anyone who has studied or worked, or even done business overseas has probably
come across the problem of how to exchange and send money abroad. Banks and
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brokers usually charge a premium on the total amount exchanged as well as a transfer
fee. But over time, a new niche developed in the market to address this need. A new
wave of internet-based, peer-to-peer (P2P) foreign currency exchange services is cutting
banks—not to mention their fees—out of the exchange. Through an online P2P platform,
individuals can find and safely exchange currency with individuals in other countries at
much lower costs. Most online P2P companies claim to provide up to a 90% cost saving to
clients on international exchange and transfer fees. Read on to find out more about how
this part of the industry works.”
Warrant: Successful implementation of a central bank digital currency would require
surpassing a number of hurdles
Allen, Sarah, et al. “Design Choices for Central Bank Digital Currency.” Brookings,
Brookings, 23 July 2020, https://www.brookings.edu/wpcontent/uploads/2020/07/Design-Choices-for-CBDC_Final-for-web.pdf.
“CBDCs also give rise, however, to a host of challenging technical goals and design
questions that are qualitatively and quantitatively different from those in existing
government and consumer payment systems. A well-functioning CBDC will require an
extremely resilient, secure, and performant new infrastructure, with the ability to
onboard, authenticate, and support users on a massive scale. It will necessitate an
architecture simple enough to support modular design and rigorous security analysis, but
flexible enough to accommodate current and future functional requirements and use
cases. A CBDC will also in some way need to address an innate tension between privacy
and transparency, protecting user data from abuse while selectively permitting data
mining for end-user services, policymakers, and law enforcement investigations and
interventions.”
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Warrant: Central bank digital currencies raise serious privacy concerns
Allen, Sarah, et al. “Design Choices for Central Bank Digital Currency.” Brookings,
Brookings, 23 July 2020, https://www.brookings.edu/wpcontent/uploads/2020/07/Design-Choices-for-CBDC_Final-for-web.pdf.
“Privacy: Should a CBDC maintain the account balances of individuals on the ledger, which
would seem to be a prerequisite for a retail CBDC, then privacy will become an issue of
major importance. (The same is true for alternative representations of value, such as
digital banknotes.) While there are cryptographic systems for maintaining transactional
privacy in such settings, they are complex and costly, and unlikely to scale to meet the
requirements of a CBDC in the short-to-medium term. One critical observation is that
pseudonymous accounts, i.e., accounts in which account holders’ names are kept secret,
offer only weak privacy. Under many circumstances, as the history of cryptocurrencies
shows, it would be possible to deanonymize accounts. In a practical sense, therefore, a
CBDC will reveal significantly more information about individuals’ transactions to central
banks than existing systems do. This observation strongly motivates considered technical
and legal confidentiality protections for ledger contents.”
Impact: Central bank digital currencies would make central banks too powerful at the
expense of private banks
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“One of the main arguments against CBDCs made by critics, including various central bank
officials, is that there is no “compelling demonstrated need” for such a currency, as
central banks and private banks already operate trusted electronic payment systems that
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generally offer fast, easy, and inexpensive transfers of value. These opponents argue that
a CBDC in the form of individual direct accounts at the central bank would reduce bank
lending or inappropriately expand central banks’ role in lending. A portion of consumers
likely would shift their deposits away from private banks toward central bank digital
money, which would be a safe, government backed liquid asset. Deprived of this funding,
private banks likely would have to reduce their lending, leaving central banks to decide
whether or how they should support lending markets to avoid a reduction in credit
availability.”
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CON: Regulation will inspire political backlash
Argument: Politicians are not in support of regulation, and powerful forces will work against it.
Warrant: Crypto Mining regulation is political toxic
Nikhilesh De, 1-19-2021, business reporter at CoinDesk with a focus on regulators,
lawmakers and institutions, "What the Crypto World Should Watch for in the
Biden Era," CoinDesk, https://www.coindesk.com/biden-inauguration-cabinetcrypto-sec-cftc-occ)SEM
Congress: Bringing back real-time payments Let’s get to the really interesting bits:
Senator Sherrod Brown (D-Ohio) is going to run the Senate Banking Committee for the
next Congressional session, and one of his focuses will be on real-time payments and
how to implement them, as well as in bringing the financially excluded onto payment
rails. An idea being tossed around is postal banking, where post offices (which are
plentiful) are able to provide certain financial services. Rohan Grey, a legislative adviser
who helped create the STABLE Act, said FedAccounts will likely receive a lot of attention.
Brown himself mentioned the concept during a virtual media availability. “The Fed will
administer, not subsidize, a no-fee account. It can be done online, it can be done at post
offices … you can get access perhaps at a small bank in your neighborhood,” he said of
the idea. One common perception around crypto is that proof-of-work networks like
Bitcoin are incredibly energy intensive and are primarily powered by oil or coal plants.
Industry participants say hydroelectric and other forms of renewable energy sources are
used instead. Either way, regulators like the New York Department of Financial Services
and CFTC are warning their regulated firms to be mindful of the environmental costs of
their services. Crypto miners in the U.S. in particular may see new requests or
regulations heading their way. The other major storyline to watch out for is how
exactly Congress will proceed in the coming weeks and months. We all saw the mob
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breach the U.S. Capitol Building in January, followed by several Republican Senators and
Representatives objecting to the acceptance of the certified Electoral College votes from
the states of Arizona and Pennsylvania. Several members of the Congressional
Blockchain Caucus gave speeches and voted against accepting the votes – essentially
disagreeing with consensus, to use a rough crypto analogy. Punchbowl News reported
that some Democratic lawmakers and aides are considering freezing the objectors out of
parts of the legislative process. This could mean that bills introduced by blockchain
proponents like Rep. Warren Davidson (R-Ohio), such as the Token Taxonomy Act,
might go nowhere if they’re introduced or reintroduced this year. Kristin Smith,
executive director of the Blockchain Association, said the “political tensions right now
are incredibly high,” and noted that “there’s currently a lot of pressure on Democrats
to stop working across the aisle with anyone who voted the other way” last week,
though she expects this to subside as time moves on. “The Democrats may have the
White House, the House and the Senate today but they won’t always be on that side of
things and they’ll want to work across the aisle when they’re in the minority as well,”
she said. “I’m hopeful we’ll return to seeing some bipartisanship.”
Context: Blockchain Association lobbying would make the situation toxic
Brian Fung, Washington Post, 9-11-2018 ["Get ready for Big Bitcoin: Cryptocurrency
industry opens a D.C. lobbying arm",
https://www.washingtonpost.com/technology/2018/09/11/get-ready-bigbitcoin-cryptocurrency-industry-opens-dc-lobbying-arm/?noredirect=on, 10-102021] Srikar T. S.
The price of bitcoin may be down, compared with last year's meteoric heights. But
industry officials aren't waiting for the next spike in investor demand to launch a charm
offensive targeting federal lawmakers and regulators who've taken an interest in
cryptocurrencies. Tech veterans and a number of high-profile cryptocurrency
companies on Tuesday said they are forming the Blockchain Association, the first fully
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fledged lobbying group in Washington representing entrepreneurs and investors who
are building off the technology behind bitcoin. Joining the initial push are companies
such as Coinbase and Circle, which operate some of the world's most popular virtual
currency exchanges, as well as the technology start-up Protocol Labs. Investors, such as
Digital Currency Group and Polychain Capital, are also among the founding members.
Warrant: Crypto-lobbyists have already enlisted the support of powerful politicians
Brian Fung, Washington Post, 9-11-2018 ["Get ready for Big Bitcoin: Cryptocurrency
industry opens a D.C. lobbying arm",
https://www.washingtonpost.com/technology/2018/09/11/get-ready-bigbitcoin-cryptocurrency-industry-opens-dc-lobbying-arm/?noredirect=on, 10-102021] Srikar T. S.
The group has already made its first hire: Kristin Smith, who was an aide to then-Sen.
Olympia J. Snowe (R-Maine) and went on to lobby on blockchain issues for
Overstock.com, the online retailer that in 2014 began accepting payments in bitcoin.
"I've been spending a lot of time doing a lot of the basic education work in this space,”
said Smith, who is expected to guide the trade group through its early steps. “I'm
excited to focus exclusively on these issues." Policymakers have been confronted in
recent months with an array of cryptocurrency issues as investors have flocked to
bitcoin and other virtual currencies. The technology on which they're based raises
novel questions about financial regulation in a digital age — and in some cases,
consumers have become the victims of scams that have attracted attention from state
and federal regulators. Congressional hearings on cryptocurrency and recent decisions
by the Securities and Exchange Commission have also highlighted bitcoin's and other
cryptocurrencies' growing profile.
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A/2: Regulation of Cryptocurrency will protect consumers
Mitigate: Consumers don’t always fully understand financial decisions.
Lane, Philip R. “Philip R Lane: The Role of Financial Regulation in Protecting Consumers.”
The Bank for International Settlements, 10 Mar. 2017,
https://www.bis.org/review/r170310b.htm.
The fast pace of financial innovation has created a complex world for consumers, where
the range of available financial products is broad, and the consequences of financial
choices are significant. Coupled with this, the typical household tends to have a limited
personal track record in making financial decisions, since the purchase of financial
products happens only infrequently. This is problematic, since the demands for financial
sophistication and knowledge are sizeable if a consumer is to navigate safely through
the options put forward by providers of financial services. Financial decisions often
require consumers to assess risk and uncertainty, for example, and to consider tradeoffs between the near term and the long term. A growing body of academic literature
shows that, among the general population, the level of financial knowledge, skills and
ability to consider such complexities is low.
Warrant: Consumers falsely believe that they have a financial safety net for crypto.
Darbyshire, Madison. “What Protections Do Consumers Have in Crypto Trading?”
Subscribe to Read | Financial Times, Financial Times, 30 June 2021,
https://www.ft.com/content/f0f5e12d-729a-4c74-89cb-2ad96b5828e2.
The UK regulator’s clampdown on Binance, one of the world’s largest cryptocurrency
exchanges, offers a reminder to consumers around the world that they will struggle to
retrieve any of their money stashed in these new assets if something goes wrong. So
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far, this message has not cut through. Fewer than one in 10 potential buyers of
cryptocurrencies have seen official warnings about crypto, according to Financial
Conduct Authority research this month, and about 15 per cent of crypto holders
incorrectly believed they had some financial safety net.
Turn: Digital currency lack of regulation is untenable.
Scott D. Hughes. “Cryptocurrency Regulations and Enforcement in the U.S.” 2017 W. St.
U. L. Rev., 45, Pp. 1.
https://projects.iq.harvard.edu/fintechlaw/publications/cryptocurrencyregulations-and-enforcement-us
Decentralized cryptocurrencies are a new type of technology that can be used in several
applications, such as transferring money, recording data, and investing. Unlike most
businesses that can be invested in, decentralized cryptocurrencies do not have a
specific legal entity that is responsible for consumer protection. The virtual and
decentralized nature of this technology makes the application of traditional legal
frameworks untenable. Furthermore, the absence of a specific legal entity makes
enforcement of any new legal framework tenuous. For these two reasons, the current
regulatory status of decentralized cryptocurrencies, or digital currencies, is enigmatic.
Uniqueness: Regulations will not better protect consumers that banning crypto.
Alpen Sheth, Alpen. “How to Meet the Crypto Regulatory Challenge.” World Economic
Forum. Sept 2021. https://www.weforum.org/agenda/2021/09/meeting-thecrypto-regulatory-challenge/.
Banning cryptocurrencies will not prevent adoption, however, it will only limit
regulators’ abilities to guide market activity around these networks and address their
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unique potential risks. Regulations informed by actual use cases and consultations with
technology innovators will prove more robust in the long run and will reinforce
important policy objectives driving economic inclusion, competition and growth.
Scope: Billions in crypto fraud happened in just one year.
Mozee, Carla. “Cryptocurrency Hacks and Fraud Are on Track for a Record Number of
Incidents in 2021, Data Shows.” Business Insider, 31 Aug 2021.
https://markets.businessinsider.com/news/currencies/cryptocurrency-hacks-fraudcases-record-bitcoin-ethereum-wallets-breaches-defi-2021-8.
Cases of breaches and fraud in the cryptocurrency market are pushing toward their
highest count this year, a study released Tuesday showed, rising alongside growth in the
market itself to a more than $2 trillion valuation. 32 incidents of hacks and fraud for a
total value of $2.99 billion have taken place so far in 2021. That's on course to break the
38 cases tallied in 2020, with that figure representing a 40.7% climb from 2019,
according to analysis from Crypto Head, which tracks information and writes guides about
the cryptocurrency market.
The average value of this year's breach and fraud cases comes in at $93.3 million. On
average, the number of offenses grows 41% every year, it said.
Scope/Magnitude: Thousands all over the world are harmed by lack of crypto regulation.
Constable, Simon. “U.S. Saw More than 80,000 Cryptocurrency Frauds in 2020: Report.”
Forbes, Forbes Magazine, 2 July 2021,
https://www.forbes.com/sites/simonconstable/2021/06/29/us-saw-more-than80000-cryptocurrency-frauds-in-2020-report/?sh=1b4ccc436f0b.
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Last year, while bitcoin prices were booming so was crypto-related fraud. In the U.S.
alone 82,135 crimes involving cryptocurrencies such as bitcoin, ethereum, and other
digital currencies got reported. That’s up more than 24,000% from the 340 reported in
2016, according to new research from crypto education platform Crypto Head. Similar
patterns were seen in elsewhere in the world. In 2020 there were 9,689 crypto crimes
reported in Australia compared to zero in 2016. In the UK last year 8,801 cryptorelated crimes got reported up from 704 in 2016.
Analysis: Thousands of consumers world wide suffer from cryptocurrency crimes. Lack of
regulations is not only harming thousands of individuals, but is also harming their trust in the
industry, keeping that money from working in the economy, and could potentially harm crypto
currency from becoming a legitimate currency to help financial equity issues around the world.
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A/2: Regulation can limit criminal use and harms
Mitigate: Cryptocurrency investment is harmed by criminal use of crypto.
Emefiele, Godwin. “Cryptocurrencies Unregulated, Prone to Financial Crimes – CBN.”
Vanguard News, 8 Feb. 2021,
https://www.vanguardngr.com/2021/02/cryptocurrencies-unregulated-prone-tofinancial-crimes-cbn/.
It is also important to note that CBN’s position on cryptocurrencies is not an outlier as
many countries, central banks, international financial institutions, and distinguished
investors and economists have also warned against its use.
“They have all made similar pronouncements based on the significant risks that
transacting in cryptocurrencies portend – risk of loss of investments, money
laundering, terrorism financing, illicit fund flows and criminal activities.
Turn: Regulation is the only way to help stop criminal use.
Massad, Timothy. “It’s time to strengthen the regulation of cryptocurrency”. 18 Mar
2019. https://www.brookings.edu/wp-content/uploads/2019/03/TimothyMassad-Its-Time-to-Strengthen-the-Regulation-of-Crypto-Assets-2.pdf.
A second problem is the use of crypto-assets for illicit payments, with ransomware being
just one form. The pseudonymity of crypto-assets and lack of transparency on the part
of the intermediaries make crypto-assets, especially cryptocurrencies, an attractive
means to fund other types of illegal activity, the most infamous being the Silk Road dark
market created by Ross Ulbricht, on which narcotics, firearms, poisons and other goods
were sold. The Justice Department claimed the site generated sales in Bitcoin having an
aggregate value in excess of $1 billion. Guidance issued by the Financial Crimes
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Enforcement Network (FinCEN) in 2013 made it clear that cryptocurrency
“administrators” and “exchanges” must register as Money Service Businesses and comply
with reporting and record keeping requirements. But the absence of a regulatory
framework for the intermediaries that would require record keeping, reporting and
transparency makes the job of enforcing those regulations difficult. As of October 2018,
out of the 100 top exchanges listed on Coinmarket.cap, had reportedly registered with
FINCEN. The director of FinCEN, Kenneth Blanco, expressed his surprise at how many
exchanges only began compliance activities because they received notice of an
examination. “Compliance does not begin because you may get caught, or be-cause you
are about to be discovered,” Blanco declared. “That is not a culture that protects our
national security, our country, and our families. It is not a culture we will tolerate.”
Weigh: Terrorism is not curbed by regulation
United Nations Committee. “Combating Terrorist Financing.” United Nations : Office on
Drugs and Crime,
https://www.unodc.org/unodc/en/terrorism/expertise/combating-terroristfinancing.html.
Terrorist groups need money to sustain themselves and to carry out terrorist acts.
Terrorist financing encompasses the means and methods used by terrorist organizations
to finance their activities. This money can come from legitimate sources, for example
from profits from businesses and charitable organizations. But terrorist groups can also
get their financing from illegal activities such as trafficking in weapons, drugs or people,
or kidnapping for ransom.
Combating terrorist financing (CFT) is a highly complex endeavour that involves many
different actors. We support Member States with a wide variety of responses, ranging
from legislation, international policy to operational level responses. Our legal support
is underpinned in particular by the International Convention for the Suppression of
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the Financing of Terrorism (1999). We also develop the capacity of criminal justice and
law enforcement officials to investigate, prosecute and adjudicate terrorist financing
through the provision of specialized training on issues related to special investigation
techniques, freezing, seizing and confiscating terrorist assets, and strengthening
regional and international cooperation against the financing of terrorism.
Weigh: Millions of cryptocurrency is used in illegal drug sales happens every year.
Popper, Nathaniel. “Bitcoin Has Lost Steam. but Criminals Still Love It.” The New York
Times, The New York Times, 28 Jan. 2020,
https://www.nytimes.com/2020/01/28/technology/bitcoin-black-market.html.
But one corner of the Bitcoin economy is still going strong: the sale of illegal drugs and
other types of lawbreaking. The amount of cryptocurrency spent on so-called dark net
markets, where stolen credit card information and a wide array of illegal drugs can be
purchased with Bitcoin, rose 60 percent to reach a new high of $601 million in the last
three months of 2019, according to data released Tuesday by Chainalysis, a firm that
tracks every Bitcoin transaction and serves as an adviser to an array of government
authorities.
Weigh: Regulation that reduce terrorism and crime is a human rights issue.
Human Rights Council. “Draft report on Negative Effects of Terrorism on the Enjoyment
of Human Rights” United Nations : Twenty-first Session. 6-10 July 2018.
https://www.ohchr.org/Documents/HRBodies/HRCouncil/AdvisoryCom/Session21
/A-HRC-AC-21-CRP-2.docx
Terrorism has marked effects on the enjoyment of the most fundamental of human
rights – the right to live. Innocent victims of terrorist acts lose their right to life, an
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inalienable, constitutional right that is well grounded in the Universal Declaration of
Human Rights. The right to life, which ensures enjoyment of all other rights, is of
crucial significance for all humanity. In targeting specific groups of people by their acts
of terrorism, terrorists also infringe upon rights to equality and freedom from
discrimination. In this regard states bear the primary responsibility in preventing and
countering terrorism and extremism and protecting people within their jurisdiction
against terrorist acts; Related to the right to live is the right of the victims whose rights
to life, liberty and security have been violated. In addition to those killed and the
survivors, victims of terrorist acts include relatives and dependents of those killed,
injured or abducted, other persons who may have suffered harm in intervening to
assist them”.
Scope: Terrorism kills thousands every year.
Ritchie, Hannah, et al. “Terrorism.” Our World in Data, 28 July 2013,
https://ourworldindata.org/terrorism#how-many-people-are-killed-by-terroristsworldwide.
Over the previous decade the average number of annual deaths was 21,000. However,
there can be significant year-to-year variability. Over this decade the global death toll
ranged from its lowest of 7,827 in 2010 to the highest year of 44,490 in 2014.
Analysis: We many not be able to completely stop criminal or terrorist activity, but regulating
cryptocurrency could help track and possibly stop some of their criminal activities. Any
mitigation of their social impacts could save lives, improve human rights, and limit the impacts
on society.
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A/2: Regulation will help legitimize cryptocurrency for its
greater use
Mitigate: The trillions invested in crypto are at risk under
C. W. Walker, Martin C.W., et al. “Regulated Cryptocurrency Exchanges: Sign of a
Maturing Market or Oxymoron?” LSE Business Review, 16 Apr. 2021,
https://blogs.lse.ac.uk/businessreview/2021/04/13/regulated-cryptocurrencyexchanges-sign-of-a-maturing-market-or-oxymoron/.
Cryptocurrencies now form a major asset class with a notional value of $1.77 trillion as of
March 2021, with investments being made by publicly listed companies such as Tesla and
MicroStrategy and a greater willingness of major financial institutions to offer
cryptocurrency related services. However, the regulatory framework within which it
exists is highly concerning. In general, cryptocurrencies lack anyone that is genuinely
accountable for core processes such as transfers of ownership, trade validation and
creation of cryptocurrencies. A concern that can ultimately only be dealt with by
acceptance of the situation or outright bans. However, the almost complete lack of
regulation of the highly centralised cryptocurrency exchanges should be an easier-to-fill
gap. Regulated entities relying on prices from “exchanges” for accounting or calculation
of the value of futures contracts are clearly putting themselves at significant risk. At
least until cryptocurrency exchanges are subject to the same regulatory oversight as other
financial markets.
Turn: Businesses don’t trust the volatility of crypto.
Heaslip, Emily. “The Pros and Cons of Accepting Cryptocurrency as Payment.”
Https://Www.uschamber.com/Co, 24 Sept. 2021,
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https://www.uschamber.com/co/run/finance/accepting-cryptocurrency-aspayment.
Crypto fans appreciate that this currency is considered immune from inflation.
Governments can’t manipulate the value of cryptocurrencies, which is both a risk and a
benefit. On one hand, cryptocurrencies are a hedge against monetary inflation. On the
other hand, the value of bitcoin and other crypto is extremely volatile. In a three-month
span, the volatility of Bitcoin reached nearly 8%. For many business owners, that level
of unpredictability makes cryptocurrency simply untenable.
Weigh: Regulation and legitimization would bring in billions in unpaid taxes from crypto assets.
Franck, Tom. “U.S. Treasury Calls for Stricter Cryptocurrency Compliance with IRS, Says
They Pose Tax Evasion Risk.” CNBC, CNBC, 20 May 2021,
https://www.cnbc.com/2021/05/20/us-treasury-calls-for-stricter-cryptocurrencycompliance-with-irs.html.
The Treasury Department’s release came as part of a broader announcement on the
Biden administration’s efforts to crack down on tax evasion and promote better
compliance. Among proposals officials are considering are bolstered IRS funding and
technology, and more severe penalties for those who evade their obligations. According
to the Treasury’s estimates, the difference between taxes owed to the U.S. government
and those actually paid totaled nearly $600 billion in 2019.
Impact: Consumers want to use cryptocurrency in daily transactions.
Sraders, Anne. “How Companies Are Using Bitcoin and Other Digital Currency.” Fortune,
Fortune, 29 July 2021, https://fortune.com/2021/07/29/companies-using-bitcoinbtc-crypto-101/.
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"I think we are so early in the understanding of what Bitcoin in particular and
cryptocurrency in general is going to mean for our financial system and for commerce,"
Mark Palmer, a fintech and cryptocurrency analyst at investment firm BTIG, tells Fortune.
"We have holders of Bitcoin who believe it makes zero sense to use it for purchases,
simply because many of those who are holding it at these levels believe it's going to be
trading at $100,000 to $200,000-plus, and the last thing you want to do is look back at
that time in 2021 when you used your Bitcoin to buy a cup of coffee." "One of the big
questions that needs to be addressed is the extent to which holders of crypto are even
interested in participating in commerce," Palmer adds. It seems some crypto holders, at
least, are interested. According to a July report from credit card behemoth Visa, over $1
billion was spent using crypto-linked Visa cards in the first half of 2021. (To put that in
perspective, Visa handled $11.6 trillion in volumes in the 12 months ending March 31—
so crypto is still small potatoes.) And many companies are increasingly offering cryptolinked payment options, albeit most still convert the coins into fiat currency during the
transaction. According to a December estimate by fintech Fundera, over 2,300 businesses
in the U.S. accepted Bitcoin, excluding Bitcoin ATMs. With the growing popularity of
crypto (and the growing number of coins in circulation), some companies are aiming to
get ahead of the curve and potentially capture a new crypto-centric customer.
Turn: Consumers need legitimacy to take advantage of cryptocurrency
Haar, Ryan. “Should You Buy Things with Crypto? Here's Why You Shouldn't | Nextadvisor
with Time.” Time, Time, 29 June 2021,
https://time.com/nextadvisor/investing/cryptocurrency/should-you-use-cryptolike-cash/.
Bitcoin, the first cryptocurrency, was originally intended to be used exactly like money.
Its white paper dubbed it a “peer-to-peer electronic cash system.” But
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Bitcoin’s frequent and volatile price fluctuations make that unrealistic in practice. “The
price volatility kind of makes it useless as an electronic cash system,” says Ollie Leech,
learn editor at CoinDesk, a leading cryptocurrency news outlet. “No person in their right
mind would want to buy a coffee with Bitcoin. Say you pay $3 for the coffee, and
tomorrow your Bitcoin could be worth $30. That’s a loss.”
Uniqueness: Banks need legitimacy to take fully commit to custody of cryptocurrency.
Zochodne, Geoff. “Everyone Is Talking up Bitcoin as Cryptocurrencies Go Mainstream.”
Financialpost, Financial Post, 6 Apr. 2021,
https://financialpost.com/technology/everyone-is-talking-up-bitcoin-ascryptocurrencies-go-mainstream.
Another recent convert is Bank of New York Mellon Corp., the oldest bank in the United
States, which on Feb. 11 announced it was forming a business unit that intends to allow
for the transfer, safekeeping and issuance of digital assets. A spokesperson for BNY
Mellon said the custody bank’s platform would be a “global solution,” and one that
would be offered in Canada. A day later, a joint venture between BNY Mellon and
Canadian Imperial Bank of Commerce was announced as the administrator of Purpose
Investments Inc.’s bitcoin exchange-traded fund. CIBC Mellon said it still operates in “a
highly-regulated environment,” so any services must meet with the approval of
financial watchdogs. It may act as a fund administrator, but said it does not currently
provide custody for cryptocurrency.
Analysis: While cryptocurrency is the wave of the future, until regulations are in place, banks
and businesses will not be able to see it as legitimate stable assets or funds. Regulation at the
federal level will enable the stabilization and fully realize cryptocurrencies future.
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A/2: Regulation of cryptocurrency will benefit cryptocurrency.
Turn: Regulations will not make a safer market to increase prices.
Edmondson, Brian. “How Bitcoin Regulations May Be Necessary for Safer Investing.” The
Balance, The Balance, 20 July 2021, https://www.thebalance.com/can-bitcoinregulation-make-cryptocurrency-safer-4173836.
Bitcoin regulation has the potential to make the market much safer. It will still likely be
a risky investment, but with protections for investors, it’s less likely that the market will
be able to face as much outside manipulation. Overall, this is a good thing for people
who want to invest in cryptocurrency. Safer markets mean more public confidences,
which often means prices go up over time.
Turn: Lack of crypto regulation makes investment more difficult for professional institutions.
Kharpal, Arjun. “Cryptocurrencies: Regulating the New Economy.” CNBC, CNBC, 12 Apr.
2019, https://www.cnbc.com/2018/08/09/cryptocurrencies--regulating-the-new-economy.html.
But it’s not just the ICO markets that U.S. regulators are looking at. There has been recent
rising interest from professional institutional investors wanting to get involved in the
cryptocurrency space. But the lack of regulation and difficulty in buying crypto-assets on
exchanges has put them off. Many feel that the regulations do not offer enough
protection. So these investors have been looking to traditional financial instruments to
help them invest in digital coins.
Weigh: Regulations will increase the economic benefit of cryptocurrency.
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Fanusie, Ihsaan. “Crypto to see long-term benefits from new infrastructure bill
regulations: analyst.”Yahoo!News. 3 Aug 2021. https://news.yahoo.com/cryptoassets-to-benefit-from-new-infrastructure-bill-regulations-analyst183851933.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNv
bS8&guce_referrer_sig=AQAAALkFTj2KtHmCXjKHBCHgmBlfEtCBvRwF3BmGjEHQOkus-dPLbUeQtCdSie8QuFW4si9kOd5ZjXvy4Ia0gIrvs_eboq7PQYoMKeKY6fTcZIwwHlCIbaJR
1SEWHFAK45Mb_5i_sG7RyqZgGTahSa404cqAzsvW8CxXoPHPiDv21S
Although the new rules could cause a drop-off of crypto activity initially, Ellis told
Yahoo Finance, “over the long term we view this as absolutely a positive.”
“More crypto clarity around crypto regulation helps legitimize and mainstream crypto
investing, opening up crypto investing to a much broader array of ... mainstream
investors,” she added. With greater clarity and transparency in the legislative and
regulatory environment, Ellis added, the private sector is expected to incorporate
crypto in a variety of ways in the near future. Some publicly-owned corporations have
chosen to purchase large amounts of crypto to hold as an asset, whereas new-age
financial services companies like Robinhood (HOOD) have begun allowing users to trade
bitcoin (BTC-USD) or other cryptocurrencies on their platforms. Experts have noted that
cryptocurrencies and crypto technology represent one of the fastest growing areas of
the economy even now.
Scope: Cryptocurrency is an equitable global currency leveling the financial field for many.
Moy, Christine. “Cryptocurrencies Can Enable Global Financial Inclusion. Will You
Participate?” World Economic Forum, 9 June 2021.
https://www.weforum.org/agenda/2021/06/cryptocurrencies-financial-inclusionhelp-shape-it/.
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The crypto economy is leading to the development of an alternative financial and
technological infrastructure that is global, open source, and accessible to all who have
access to the internet, regardless of nationality, ethnicity, race, gender, and
socioeconomic class. The mainstream narrative on cryptocurrencies has typically
addressed the speculative and risky nature of this new investable asset class, its uses in
cybercrime and the dark web, the negative ESG impacts of mining, and in some cases the
victimization of uninformed consumers. However, perhaps not enough is said or written
about how this new hotbed of global and open financial experimentation in the crypto
economy is resulting in tangible, programmable, and modular technologies focused on
value store, peer-to-peer micropayments, lending, margin/collateralization, market
making, and price discovery. Today, these automated technologies are being tested in
real life by millions of people with billions of dollars that could potentially evolve and
lead to the broader global financial inclusiveness of billions of under- and unbanked
people tomorrow through simple to set-up and low cost automated financial services at
scale.
Uniqueness: The largescale growth of cryptocurrency is driving calls for protection.
Crawley, Jamie“Cryptocurrency Market Will More than Triple by 2030: Study - Coindesk.”
CoinDesk Latest Headlines RSS, 25 Aug. 2021,
https://www.coindesk.com/markets/2021/08/25/cryptocurrency-market-willmore-than-triple-by-2030study/#:~:text=The%20global%20cryptocurrency%20market%20will,12.8%25%20be
tween%202021%20and%202030.
The global cryptocurrency market will hit $4.94 billion by 2030, more than triple its
estimated size of $1.49 billion in 2020, according to a new study.The report by Allied
Market Research published Tuesday projects a compound annual growth rate of 12.8%
between 2021 and 2030. The report largely echoes of another recent study by the same
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company into the crypto asset-management market, which it projects will grow to $9.4
billion in 2030 from $670 million in 2020. That also identified Asia-Pacific as the region
for the most significant growth because of the large numbers of crypto mining enterprises
there, driving demand for asset-management products and services to help manage
their business processes.
Weigh: Regulation will ensure that cryptocurrency will benefit all.
Gebbing, Henrik, and Wilhelm Nöffke. “Regulating Crypto Is Essential to Ensuring Its
Global Legitimacy.” TechCrunch, TechCrunch, 16 Aug. 2021,
https://techcrunch.com/2021/08/16/regulating-crypto-is-essential-to-ensuring-itsglobal-legitimacy/.
Technology with such immense potential should be made accessible, regulated and
beneficial for everyone. Blockchain and digital assets are already revolutionizing the
way we operate, and regulatory measures need to follow suit. The way forward cannot
simply be delivering old-school directives, demanding obedience and doling out unfair
punishments. There’s no reason a new way forward isn’t possible.
Analysis: Cryptocurrency is a fast growing equitable alternative to establishment currency.
Regulations will stabilize and ensure that the benefits of equity it provides world wide will
continue and grow. Not only are the regulations for this million dollar industry, but it is
welcomed and wanted by those who want to legitimize and keep it from harming consumers
and investements.
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A/2: Unregulated cryptocurrency benefits businesses
Mitigate: Regulation of cryptocurrency is desired by currency exchanges
Nesto, Nate. “With Proper Regs, Crypto Could Be Crime-Fighter.” PYMNTS.com, 8 Sept.
2021, https://www.pymnts.com/cryptocurrency/2021/with-proper-regs-cryptocould-be-crime-fighter/.
Lennix Lai, director of financial markets at OKEx, a Hong Kong-based cryptocurrency
exchange, told PYMNTS in an interview that he actually welcomes U.S. regulation of
crypto because he says it will likely take a very balanced approach and others will be
encouraged to follow its lead. “It doesn’t need to be too strict, but a bare minimum of
regulation, things like Know Your Customer [KYC], Anti-Money Laundering [AML] rules
and verification, is something that crypto really needs,” he said.
Joining the conversation was Garient Evans, senior vice president of identity solutions
at Trulioo, who said he also welcomes regulation to crypto. According to him, the vast
majority of companies in the cryptocurrency space, including most exchanges, want to
see a more transparent and stable ecosystem develop. He likened the situation in crypto
now to what happened in the late 2000s in the U.S., when FinTechs first emerged
following the Great Recession.
Turn: Business Investors are seeking regulatory protections.
Pazzanese, Christina. “Regulators put cryptocurrency in crosshairs.” The Harvard Gazette.
29 Sept 2021. https://news.harvard.edu/gazette/story/2021/09/regulating-theunregulated-cryptocurrency-market/
But that success may have a price. Calls to rein in the industry are at fever pitch. This
month China, one of the world’s largest digital currency markets, outlawed all crypto-
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related transactions. It banned trading them in 2019. The U.S. Treasury said this week
it will sanction a cryptocurrency exchange for the first time for facilitating
ransomware payments. New tax and trading rules for the industry are included in
legislation Congress is scheduled to vote on by week’s end. And the U.S. Securities and
Exchange Commission is also pushing for greater enforcement. SEC Chairman Gary
Gensler called cryptocurrency an asset class “rife with fraud, scams, and abuse” and
said investors don’t have enough regulatory protection from the swarms jumping into
crypto finance, issuance, trading, and lending.
Uniqueness: Regulation will engender trust and help growth.
Feinstein, Brian. “Why Regulation won’t harm Cryptocurrencies”. Knowledge at Wharton.
27 Apr 2021. https://knowledge.wharton.upenn.edu/article/why-regulation-wontharm-cryptocurrencies/
The confirmation on April 14 of Gary Gensler as chairman of the Securities and Exchange
Commission has fueled worries that increased regulation of cryptocurrencies would
hurt trading volumes and prices and stifle innovation in the nascent segment, and
prompt industry participants to flee to less stringent jurisdictions. However, those fears
are unfounded, and tighter regulation could purge the industry of bad actors and
engender trust, which in turn would help it grow, according to Brian Feinstein and Kevin
Werbach, Wharton professors of legal studies and business ethics.
Weigh: Unregulated cryptocurrencies leads to bans harming businesses world wide.
Person. “China Bans Financial, Payment Institutions from Cryptocurrency Business.”
Reuters, Thomson Reuters, 18 May 2021,
https://www.reuters.com/technology/chinese-financial-payment-bodies-barredcryptocurrency-business-2021-05-18/.
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China has banned financial institutions and payment companies from providing services
related to cryptocurrency transactions, and warned investors against speculative crypto
trading.
It was China’s latest attempt to clamp down on what was a burgeoning digital trading
market. Under the ban, such institutions, including banks and online payments
channels, must not offer clients any service involving cryptocurrency, such as
registration, trading, clearing and settlement, three industry bodies said in a joint
statement on Tuesday.
Weigh: Regulated cryptocurrencies will open new business opportunities.
Haris Elias, et al. “Cryptocurrency: How 'Legitimizing' Crypto Could Benefit Businesses.”
TechHQ, 28 Sept. 2020, https://techhq.com/2020/09/how-legitimizingcryptocurrency-could-benefit-businesses/.
A regulated market ultimately opens new doors for other industries, and in the realm of
digital marketing, this might not be truer. Branded coins are not just attracting potential
investors but generate plenty of hype within the community. The crypto community is
nowadays one of the largest communities you can find online and has become a lucrative
audience segment for many digital marketing campaigns. The future of cryptocurrency
still hangs in the balance, however, to achieve mass adoption while protecting financial
markets, regulation is essential. Financial institutions and mainstream investors seek
order in a controlled environment in which to conduct business. Regulation shouldn’t
spell the end but rather the beginning of the crypto industry.
Anaylsis: Some say that regulations of crypto currency won’t help business, but businesses and
the crypto currency industry itself are welcoming regulations in order to boost its protection of
customers and businesses alike. When business and customers trust that protection, then they
are more likely to accept and use cryptocurrency. This benefits everyone, and especially
businesses and their ability to conduct transactions internationally.
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A/2: US gov should increase regulations on cryptocurrency
assets and/or transactions through firm taxation policy
Warrant: Taxing cryptocurrency exchanges will push investors to decentralized exchanges
that are more difficult to track
“Toomey Raises Concern Over Burdensome Cryptocurrency Regulations.” United States
Committee on Banking, Housing, and Urban Affairs, 10 June 2021,
https://www.banking.senate.gov/newsroom/minority/toomey-raises-concern-overburdensome-cryptocurrency-regulations.
“In December of 2020, the Financial Crimes Enforcement Network (“FinCEN”) proposed a
rule that would impose on cryptocurrency transactions onerous recordkeeping and
reporting requirements that extend beyond existing requirements for U.S. dollar
transactions. As Ranking Member Toomey pointed out, the rule may actually prove to be
counterproductive in combatting illicit activity. “[FinCEN’s proposed rule] could cause
illicit transactions to become less traceable than they otherwise would be. By limiting
individual privacy and the ability to transact with financial institutions, the rule would
likely push bad actors to utilize methods that do not interface with financial institutions.
As a result, such cryptocurrency transactions would be less susceptible to appropriate
government oversight and detection.” Ranking Member Toomey also raised concerns
over the Financial Action Task Force’s (“FATF”) draft guidance on cryptocurrencies and
Virtual Asset Service Providers (VASPs), which would impose stringent regulatory
requirements on cryptocurrency transactions. “FATF’s guidance will drive cryptocurrency
transactions away from financial institutions, undermining the ability of law enforcement
and analytics firms to identify and track illicit activity. FATF should revise its guidance to
focus on transactions and entities that warrant regulation.””
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Warrant: Tax evasion is common and likely will not cease because of implementations.
History proves that tax evasion is common
Slemrod, Joel. “Cheating Ourselves: The Economics of Tax Evasion.” Journal of Economic
Perspectives, 2007, http://darp.lse.ac.uk/papersdb/Slemrod_(JEP07).pdf.
“No government can announce a tax system and then rely on taxpayers’ sense of duty to
remit what is owed. Some dutiful people will undoubtedly pay what they owe, but many
others will not. Over time the ranks of the dutiful will shrink, as they see how they are
being taken advantage of by the others. Thus, paying taxes must be made a legal
responsibility of citizens, with penalties attendant on noncompliance. But even in the face
of those penalties, substantial tax evasion exists—and always has. The history of taxation
is replete with episodes of evasion, often notable for their inventiveness. During the third
century, many wealthy Romans buried their jewelry or stocks of gold coin to evade the
luxury tax, and homeowners in eighteenth-century England temporarily bricked up their
fireplaces to escape notice of the hearth tax collector (Webber and Wildavsky, 1986, p.
141).”
Warrant: Tax evasion is common in the United States
Slemrod, Joel. “Cheating Ourselves: The Economics of Tax Evasion.” Journal of Economic
Perspectives, 2007, http://darp.lse.ac.uk/papersdb/Slemrod_(JEP07).pdf.
“Determining the extent of evasion is not straightforward for obvious reasons. (Would
you answer survey questions about tax evasion honestly?) Because tax evasion is both
personally sensitive and potentially incriminating, self-reports are vulnerable to
substantial underreporting (Baumeister, 1982). Moreover, the dividing line between
illegal tax evasion and legal tax avoidance is blurry. Under U.S. law, tax evasion refers to a
case in which a person, through commission of fraud, unlawfully pays less tax than the
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law mandates. Tax evasion is a criminal offense under federal and state statutes,
subjecting a person convicted to a prison sentence, a fine, or both. An overt act is
necessary to give rise to the crime of income tax evasion; therefore, the government must
show willfulness and an affirmative act intended to mislead. Some tax understatement is,
however, inadvertent error, due to ignorance of or confusion about the tax law (as is
some overpayment of taxes). Although the theoretical models of this issue generally refer
to willful understatement of tax liability, empirical analyses cannot precisely identify the
taxpayers’ intent and therefore cannot precisely separate the willful from the
inadvertent. Nor can they, in complicated areas of the tax law, precisely distinguish the
illegal from the legal. Although this review is intended to address willful tax
noncompliance, the difficulty of identifying this behavior is reflected in the varying terms
to which the analyses refer, such as “evasion,” “noncompliance,” “misreporting,” and “tax
gap.” In what follows, when discussing empirical estimates I generally use the term that
generated the estimates employed, and use the term “evasion” in discussing theoretical
treatments of willful noncompliance.”
Warrant: The resulting decrease in tax revenues collected by the IRS over the years is
substantial
Gale, William G., and Aaron Krupkin. “How Big Is the Problem of Tax Evasion?” Brookings,
Brookings, 9 Apr. 2019, https://www.brookings.edu/blog/upfront/2019/04/09/how-big-is-the-problem-of-tax-evasion/.
“The Internal Revenue Service (IRS), which is responsible for enforcing the tax rules, has
seen its funding and employment decrease. IRS funding has fallen by more than 12
percent in inflation-adjusted terms from fiscal year 2008 through fiscal year 2017, and
IRS employment dropped by more than 15 percent over the same period. The
enforcement division of the IRS has had the largest percentage decline, even as Congress
has requested the IRS to assume new administrative and enforcement responsibilities
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related to interpreting and implementing the 2017 tax overhaul, the Affordable Care Act,
the American Opportunity Tax Credit, and the Foreign Account Tax Compliance Act. In the
face of lower funding and increased responsibility, the IRS has conducted fewer audits
and provided lower-quality taxpayer service. Audit rates have fallen roughly in half over
the past two decades; the IRS audited 0.6 percent of individual returns and 1.0 percent
of corporate returns in 2017, compared to 1.0 and 2.1 percent, respectively, in 1998.
Likewise, only 38 percent of taxpayers who called the IRS received requested assistance
in 2015 as compared to 70 percent in 2011. The average telephone wait time over the
same period increased by more than 17 minutes. More generally, the IRS is falling
farther and farther behind state-of-the-art computing. Many of the computer systems
and programs are antiquated and they are using computer applications from the
1960s.”
Impact: A tax increase on crypto will stifle innovation and violate investor’s privacy
Ponciano, Jonathan. “Senate Rejects Change To New Crypto Tax Rules In $1.2 Trillion
Infrastructure Bill Despite Lawmaker, Billionaire Pushback.” Forbes, Forbes
Magazine, 10 Aug. 2021,
https://www.forbes.com/sites/jonathanponciano/2021/08/09/senate-rejectschange-to-new-crypto-tax-rules-in-12-trillion-infrastructure-bill-despite-lawmakerbillionaire-pushback/.
“Developers are the lifeblood of innovation, and subjecting them to tax reporting would
have far-reaching implications on privacy, and on the evolution of technology in this
country—not to mention, most developers would not have access to useful data [for the
IRS],” Lummis said on the Senate floor Monday. “This amendment has started the debate
on many difficult questions related to financial technology that the Senate must address
over the next few years.”
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Impact: Regulations on cryptocurrency would prevent innovation and reduce the
effectiveness of industry-led regulations that have been successful, according to the
Commissioner of the SEC
Avan-Nomayo, Osato. “Stricter Crypto Laws Will Stifle Innovation, Says SEC Commissioner
Hester Peirce.” Cointelegraph, Cointelegraph, 9 June 2021,
https://cointelegraph.com/news/stricter-crypto-laws-will-stifle-innovation-says-seccommissioner-hester-peirce.
“Hester Peirce of the United States Securities and Exchange Commission has once again
urged regulators to take a step back from attempting to overregulate the crypto space.
Speaking to Financial Times, Peirce, affectionately dubbed “Crypto Mom” due to her
positive stance on cryptocurrencies, argued against the need for strict regulatory policies.
According to Peirce, regulators by nature often have a knee-jerk reaction to emerging
market spaces, often at the expense of innovation. The SEC commissioner warned that
pursuing stricter regulatory policies eliminates the ability of market participants to carry
out peer-to-peer transactions. Rather than emphasizing government regulations, Peirce
advocates for industry-led regulatory activities. Indeed, the commissioner is a
longstanding supporter of crypto self-regulation. Back in March 2019, Peirce made the
case for crypto self-regulatory organizations in a debate with the current SEC chairman
Gary Gensler.”
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A/2: US gov should increase regulations on cryptocurrency
assets and/or transactions sent abroad
Warrant: Regulating cryptocurrency exchanges will push investors to decentralized exchanges
that are more difficult to track
“Toomey Raises Concern Over Burdensome Cryptocurrency Regulations.” United States
Committee on Banking, Housing, and Urban Affairs, 10 June 2021,
https://www.banking.senate.gov/newsroom/minority/toomey-raises-concern-overburdensome-cryptocurrency-regulations.
“In December of 2020, the Financial Crimes Enforcement Network (“FinCEN”) proposed a
rule that would impose on cryptocurrency transactions onerous recordkeeping and
reporting requirements that extend beyond existing requirements for U.S. dollar
transactions. As Ranking Member Toomey pointed out, the rule may actually prove to be
counterproductive in combatting illicit activity. “[FinCEN’s proposed rule] could cause
illicit transactions to become less traceable than they otherwise would be. By limiting
individual privacy and the ability to transact with financial institutions, the rule would
likely push bad actors to utilize methods that do not interface with financial institutions.
As a result, such cryptocurrency transactions would be less susceptible to appropriate
government oversight and detection.” Ranking Member Toomey also raised concerns
over the Financial Action Task Force’s (“FATF”) draft guidance on cryptocurrencies and
Virtual Asset Service Providers (VASPs), which would impose stringent regulatory
requirements on cryptocurrency transactions. “FATF’s guidance will drive cryptocurrency
transactions away from financial institutions, undermining the ability of law enforcement
and analytics firms to identify and track illicit activity. FATF should revise its guidance to
focus on transactions and entities that warrant regulation.””
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Warrant: Record keeping requirements along with regulation will push investors to
decentralized exchanges
Haig, Samuel. “Jack Dorsey Warns That FinCEN Regulations Will Drive Crypto Users
Offshore.” Cointelegraph, Cointelegraph, 5 Jan. 2021,
https://cointelegraph.com/news/jack-dorsey-warns-that-fincen-regulations-willdrive-crypto-users-offshore.
Major U.S crypto firms are rallying against FinCEN’s proposed regulations that would
force businesses operating with crypto to gather information on the identities of noncustomer counterparties. A Jan. 4 letter from Jack Dorsey, CEO of financial services firm
Square takes aim at the proposal for seeking to impose reporting obligations that go “far
beyond what is required for cash transactions,” and that Sqaure would be expected to
collect “unreliable data about people who have not opted into our service or signed up as
our customers.” “Counterparty name and address collection/reporting should not be
required for [virtual currency] CTRs or recordkeeping, as it’s not required for cash today.”
Square predicts that if passed, the law would drive cryptocurrency users toward
unregulated and non-custodial crypto services based outside of the U.S. — impacting the
nation’s global competitiveness and creating further challenges for regulators: “By adding
hurdles that push more transactions away from regulated entities like Square into noncustodial wallets and foreign jurisdictions, FinCEN will actually have less visibility into the
universe of cryptocurrency transactions than it has today.”
Warrant: Regulations would push investors towards peer-to-peer network transactions that
are less regulated
Bajpai, Prableen. “Understanding Peer-to-Peer Foreign Currency Exchange.” Investopedia,
Investopedia, 21 Sept. 2021,
https://www.investopedia.com/articles/forex/030215/understand-peertopeerforeign-currency-exchange.asp.
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“Anyone who has studied or worked, or even done business overseas has probably
come across the problem of how to exchange and send money abroad. Banks and
brokers usually charge a premium on the total amount exchanged as well as a transfer
fee. But over time, a new niche developed in the market to address this need. A new
wave of internet-based, peer-to-peer (P2P) foreign currency exchange services is cutting
banks—not to mention their fees—out of the exchange. Through an online P2P platform,
individuals can find and safely exchange currency with individuals in other countries at
much lower costs. Most online P2P companies claim to provide up to a 90% cost saving to
clients on international exchange and transfer fees. Read on to find out more about how
this part of the industry works.”
Warrant: Peer to peer transactions are decentralized and are managed my machine code as
opposed to humans
Kumar, Mudit. “Decentralized P2P Exchange Development: Compact Insights
Inside.” Blockchain.Oodles, 17 June 2021,
https://blockchain.oodles.io/blog/decentralized-p2p-crypto-exchangedevelopment/.
“Fundamentally, it is a type of crypto exchange that is exclusively controlled and managed
by software. It enables market participants to trade directly with others. It does not
necessitate the processing of all transactions by any trusted third party. Instead, smart
contract-powered escrow mechanisms ensure trusted, transparent, and efficient
transaction exchange between traders. Regular cryptocurrency exchanges act as
intermediaries between buyers and sellers. They make a profit through fee collection on
transactions. Conversely, decentralized p2p trading interactions between participants are
directed exclusively by pre-programmed software, requiring no intermediaries.
Decentralized p2p crypto trading indeed is the epitome of the philosophy of
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decentralization. Indeed, users can buy and sell crypto assets directly without an
intermediary being present on the platform for facilitating exchanges. It does not require
government legislation and authorities’ control of any sort. Instead, smart contracts
manage all tasks by fully automating them. No human interference diminishes the
overhead costs greatly.”
Impact: Peer to peer transactions help facilitate illicit activities through convertible virtual
currencies
Advisory on Illicit Activity Involving Convertible Virtual, 9 May 2019,
https://www.fincen.gov/sites/default/files/advisory/2019-05-10/FinCEN Advisory
CVC FINAL 508.pdf.
“CVCs may create illicit finance vulnerabilities due to the global nature, distributed
structure, limited transparency, and speed of the most widely utilized virtual currency
systems. New types of anonymity-enhanced CVCs have emerged that further reduce the
transparency of transactions and identities as well as obscure the source of the CVC
through the incorporation of anonymizing features, such as mixing and cryptographic
enhancements. Mixing or tumbling involves the use of mechanisms to break the
connection between an address sending CVC and the addresses receiving CVC. Some CVCs
appear to be designed with the express purpose of circumventing anti-money
laundering/countering the financing of terrorism (AML/CFT) controls. All of these factors
increase the difficulty for law enforcement and other national security agencies’ efforts to
combat money laundering, terrorist financing, and other financial crimes facilitated
through CVC.”
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A/2: US gov should increase regulations on cryptocurrency to
prevent hacking
Warrant: Hacking typically finds its way into US cyber space regardless of regulations
Orcutt, Mike. “Once Hailed as Unhackable, Blockchains Are Now Getting Hacked.” MIT
Technology Review, MIT Technology Review, 4 May 2021,
https://www.technologyreview.com/2019/02/19/239592/once-hailed-asunhackable-blockchains-are-now-getting-hacked/.
“In short, while blockchain technology has been long touted for its security, under certain
conditions it can be quite vulnerable. Sometimes shoddy execution can be blamed, or
unintentional software bugs. Other times it’s more of a gray area—the complicated result
of interactions between the code, the economics of the blockchain, and human greed.
That’s been known in theory since the technology’s beginning. Now that so many
blockchains are out in the world, we are learning what it actually means—often the hard
way.”
Warrant: Vulnerability is built into the cryptocurrency system and is unsolvable by regulation.
In fact, regulation may make it worse as cryptocurrency becomes more complex
Orcutt, Mike. “Once Hailed as Unhackable, Blockchains Are Now Getting Hacked.” MIT
Technology Review, MIT Technology Review, 4 May 2021,
https://www.technologyreview.com/2019/02/19/239592/once-hailed-asunhackable-blockchains-are-now-getting-hacked/.
“But the more complex a blockchain system is, the more ways there are to make
mistakes while setting it up. Earlier this month, the company in charge of Zcash—a
cryptocurrency that uses extremely complicated math to let users transact in private—
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revealed that it had secretly fixed a “subtle cryptographic flaw” accidentally baked into
the protocol. An attacker could have exploited it to make unlimited counterfeit Zcash.
Fortunately, no one seems to have actually done that. The protocol isn’t the only thing
that has to be secure. To trade cryptocurrency on your own, or run a node, you have to
run a software client, which can also contain vulnerabilities. In September, developers of
Bitcoin’s main client, called Bitcoin Core, had to scramble to fix a bug (also in secret) that
could have let attackers mint more bitcoins than the system is supposed to allow. Still,
most of the recent headline-grabbing hacks weren’t attacks on the blockchains
themselves, but on exchanges, the websites where people can buy, trade, and hold
cryptocurrencies. And many of those heists could be blamed on poor basic security
practices. That changed in January with the 51% attack against Ethereum Classic.”
Warrant: The self-regulating nature of cryptocurrency and its commerce requires that
startups are created to fight hacking and does not require government regulation
Orcutt, Mike. “Once Hailed as Unhackable, Blockchains Are Now Getting Hacked.” MIT
Technology Review, MIT Technology Review, 4 May 2021,
https://www.technologyreview.com/2019/02/19/239592/once-hailed-asunhackable-blockchains-are-now-getting-hacked/.
“AnChain.ai is one of several recent startups created to address the blockchain hacking
threat. It uses artificial intelligence to monitor transactions and detect suspicious
activity, and it can scan smart-contract code for known vulnerabilities. Other
companies, including Tsankov’s ChainSecurity, are developing auditing services based
on an established computer science technique called formal verification. The goal is to
prove mathematically that a contract’s code will actually do what its creators intended.
These auditing tools, which have begun to emerge in the past year or so, have allowed
smart-contract creators to eliminate many of the bugs that had been “low-hanging fruit,”
says Tsankov. But the process can be expensive and time consuming. It may also be
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possible to use additional smart contracts to set up blockchain-based “bug bounties.”
These would encourage people to report flaws in return for a cryptocurrency reward, says
Philip Daian, a researcher at Cornell University’s Initiative for Cryptocurrencies and
Contracts.”
Warrant: Hacking cryptocurrencies is easy for hackers because lesser known cryptocurrencies
are less protected
Orcutt, Mike. “Once Hailed as Unhackable, Blockchains Are Now Getting Hacked.” MIT
Technology Review, MIT Technology Review, 4 May 2021,
https://www.technologyreview.com/2019/02/19/239592/once-hailed-asunhackable-blockchains-are-now-getting-hacked/.
“For popular blockchains, attempting this sort of heist is likely to be extremely expensive.
According to the website Crypto51, renting enough mining power to attack Bitcoin would
currently cost more than $260,000 per hour. But it gets much cheaper quickly as you
move down the list of the more than 1,500 cryptocurrencies out there. Slumping coin
prices make it even less expensive, since they cause miners to turn off their machines,
leaving networks with less protection.”
Impact: Defensive mechanisms to protect against hacking are expensive and time consuming
White, Bobby. “Where the Holes Are.” The Wall Street Journal, Dow Jones & Company, 10
June 2008, https://www.wsj.com/articles/SB121277691171152525.
“Hackers, it seems, can find a way to exploit every vulnerability in computer networks,
often before anyone else knows a weakness existed. For most corporate IT managers,
defending against hackers has meant throwing up firewalls around their networks to
deter intruders, patching the flaws that have been uncovered in their operating software
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and loading up on protective software to guard against every known type of threat. It's an
expensive and time-consuming effort, and it still leaves companies vulnerable to the next
flaw a hacker discovers first.”
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A/2: US gov should increase regulations on cryptocurrency to
prevent negative environmental impacts
Claim: Cryptocurrencies can benefit the environment
Cooling, Sam. “UN Report Says Crypto Technologies Represent 'a Limited Environmental
Impact'.” Yahoo!, Yahoo!, 8 July 2021, https://www.yahoo.com/now/un-reportsays-crypto-technologies-145935885.html.
“UN experts have stated they believe cryptocurrencies and the blockchain technology
that underpins them can play an important role in sustainable development, and may
actually benefit the environment. The United Nation’s report was commissioned in
response to the widespread environmental concerns and energy-consumption criticisms
surrounding crypto, with Bitcoin (BTC) mining taking much of the flak. The UN admitted
that “cryptocurrencies are still in their infancy, and there are still many technical and
political challenges to be overcome”. This bodes well with the report optimistic about the
future of the technologies. “The more we experiment, the more we learn about the
technology,” said Minang Acharya, a UN blockchain expert. “This is likely to improve our
UN-wide knowledge on blockchain, our understanding of the environmental and social
implications of mining operations, and improve our chances of coping with any problems
the technology may bring in the future.””
Warrant: Cryptocurrencies help the environment by making processes more transparent,
creating finance around the climate, and by creating clean energy markets
Cooling, Sam. “UN Report Says Crypto Technologies Represent 'a Limited Environmental
Impact'.” Yahoo!, Yahoo!, 8 July 2021, https://www.yahoo.com/now/un-reportsays-crypto-technologies-145935885.html.
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“The UNEP’s DTU Partnership (comprising the UNEP, the Technical University of Denmark,
and the Danish Ministry of Foreign Affairs), have stated there are three main areas where
blockchain can accelerate climate action – transparency, climate finance, and clean
energy markets. Blockchain solutions could provide a trustworthy way to show how
nations are taking action to reduce their impact on the climate. Climate financing is an
exciting use of blockchain to fight climate change, if carbon markets are scaled up then
investments that contribute to slowing the rate of climate change could be boosted,
facilitating businesses and industries to transition into low-carbon technologies. There is
also an important role for blockchain to play in accelerating the adoption of renewable
energy sources such as wind and solar power. As these sources are, by their nature,
intermittent and decentralised, new forms of energy markets are needed. Blockchain
provides a means of making these solutions marketable.”
Warrant: Proof-of-stake technology has successfully helped reduce the carbon footprint of
cryptocurrencies
Cooling, Sam. “UN Report Says Crypto Technologies Represent 'a Limited Environmental
Impact'.” Yahoo!, Yahoo!, 8 July 2021, https://www.yahoo.com/now/un-reportsays-crypto-technologies-145935885.html.
“The UN admission that blockchain and cryptocurrencies are in their infancy is right. And
as the industry continually pushes and innovates, cryptocurrencies and blockchain
technologies will become increasingly efficient in energy consumption and savings. Proof
of Stake (PoS) technology is already reducing the carbon footprint of the industry. In a
huge innovation for the industry, Ethereum 2.0 presents a move towards PoS transaction
verifications, and the Ethereum Foundation suggest this could reduce Ethereum’s
transactional energy usage by 99.5%. This follows efforts from within the community,
such as the creation of a Crypto Climate Accord in April.”
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Warrant: The carbon footprint of mining has declined substantially as a result of reduced
mining in China
Sigalos, MacKenzie. “Bitcoin Mining Isn't Nearly as Bad for the Environment as It Used to
Be, New Data Shows.” CNBC, CNBC, 20 July 2021,
https://www.cnbc.com/2021/07/20/bitcoin-mining-environmental-impact-newstudy.html.
“For years, bitcoin critics have maligned the world’s biggest cryptocurrency for polluting
the planet. But new data from Cambridge University shows that the geography of mining
has drastically changed over the last six months, and experts tell CNBC this will improve
bitcoin’s carbon footprint. China’s big crypto crackdown this spring set off a chain
reaction in the mining world. For one, it took half the world’s bitcoin miners offline
practically overnight. Fewer people mining has meant less machines running and less
power being consumed overall, which slashed bitcoin’s environmental impact. Beijing’s
new crypto rules also permanently took a lot of older and more inefficient gear offline.
And crucially, China shutting its doors to crypto mining has set off a massive migration.
Miners are now heading to the cheapest sources of energy on the planet, which more
often than not are renewable.”
Impact: Regulation discourages innovation
Avan-Nomayo, Osato. “Stricter Crypto Laws Will Stifle Innovation, Says SEC Commissioner
Hester Peirce.” Cointelegraph, Cointelegraph, 9 June 2021,
https://cointelegraph.com/news/stricter-crypto-laws-will-stifle-innovation-says-seccommissioner-hester-peirce.
“Hester Peirce of the United States Securities and Exchange Commission has once again
urged regulators to take a step back from attempting to overregulate the crypto space.
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Speaking to Financial Times, Peirce, affectionately dubbed “Crypto Mom” due to her
positive stance on cryptocurrencies, argued against the need for strict regulatory policies.
According to Peirce, regulators by nature often have a knee-jerk reaction to emerging
market spaces, often at the expense of innovation. The SEC commissioner warned that
pursuing stricter regulatory policies eliminates the ability of market participants to carry
out peer-to-peer transactions. Rather than emphasizing government regulations, Peirce
advocates for industry-led regulatory activities. Indeed, the commissioner is a
longstanding supporter of crypto self-regulation. Back in March 2019, Peirce made the
case for crypto self-regulatory organizations in a debate with the current SEC chairman
Gary Gensler.”
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A/2: US gov should increase regulation utilizing central bank
digital currencies
Warrant: Discussions of central bank digital currencies are still in speculative stages
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“Much of the discussion related to CBDCs is speculative at this point. The extent to which
a central bank could or would want to create a blockchain-enabled payment system likely
would be weighed against the consideration that these government institutions already
have trusted digital payment systems in place. Because of such considerations, the exact
form that CBDCs would take is not clear; such currencies could vary across a number of
features and characteristics. For example, it is not clear that cryptography would be
necessary to validate transactions when a trusted intermediary such as a central bank
could reliably validate them.”
Warrant: Regulations would push investors towards peer-to-peer network transactions that
are less regulated
Bajpai, Prableen. “Understanding Peer-to-Peer Foreign Currency Exchange.” Investopedia,
Investopedia, 21 Sept. 2021,
https://www.investopedia.com/articles/forex/030215/understand-peertopeerforeign-currency-exchange.asp.
“Anyone who has studied or worked, or even done business overseas has probably
come across the problem of how to exchange and send money abroad. Banks and
brokers usually charge a premium on the total amount exchanged as well as a transfer
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fee. But over time, a new niche developed in the market to address this need. A new
wave of internet-based, peer-to-peer (P2P) foreign currency exchange services is cutting
banks—not to mention their fees—out of the exchange. Through an online P2P platform,
individuals can find and safely exchange currency with individuals in other countries at
much lower costs. Most online P2P companies claim to provide up to a 90% cost saving to
clients on international exchange and transfer fees. Read on to find out more about how
this part of the industry works.”
Warrant: Successful implementation of a central bank digital currency would require
surpassing a number of hurdles
Allen, Sarah, et al. “Design Choices for Central Bank Digital Currency.” Brookings,
Brookings, 23 July 2020, https://www.brookings.edu/wpcontent/uploads/2020/07/Design-Choices-for-CBDC_Final-for-web.pdf.
“CBDCs also give rise, however, to a host of challenging technical goals and design
questions that are qualitatively and quantitatively different from those in existing
government and consumer payment systems. A well-functioning CBDC will require an
extremely resilient, secure, and performant new infrastructure, with the ability to
onboard, authenticate, and support users on a massive scale. It will necessitate an
architecture simple enough to support modular design and rigorous security analysis, but
flexible enough to accommodate current and future functional requirements and use
cases. A CBDC will also in some way need to address an innate tension between privacy
and transparency, protecting user data from abuse while selectively permitting data
mining for end-user services, policymakers, and law enforcement investigations and
interventions.”
Warrant: Central bank digital currencies raise serious privacy concerns
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Allen, Sarah, et al. “Design Choices for Central Bank Digital Currency.” Brookings,
Brookings, 23 July 2020, https://www.brookings.edu/wpcontent/uploads/2020/07/Design-Choices-for-CBDC_Final-for-web.pdf.
“Privacy: Should a CBDC maintain the account balances of individuals on the ledger, which
would seem to be a prerequisite for a retail CBDC, then privacy will become an issue of
major importance. (The same is true for alternative representations of value, such as
digital banknotes.) While there are cryptographic systems for maintaining transactional
privacy in such settings, they are complex and costly, and unlikely to scale to meet the
requirements of a CBDC in the short-to-medium term. One critical observation is that
pseudonymous accounts, i.e., accounts in which account holders’ names are kept secret,
offer only weak privacy. Under many circumstances, as the history of cryptocurrencies
shows, it would be possible to deanonymize accounts. In a practical sense, therefore, a
CBDC will reveal significantly more information about individuals’ transactions to central
banks than existing systems do. This observation strongly motivates considered technical
and legal confidentiality protections for ledger contents.”
Impact: Central bank digital currencies would make central banks too powerful at the
expense of private banks
Perkins, David W. Cryptocurrency: The Economics of Money and Selected Policy Issues.
Congressional Research Service, 9 Apr. 2020,
https://sgp.fas.org/crs/misc/R45427.pdf.
“One of the main arguments against CBDCs made by critics, including various central bank
officials, is that there is no “compelling demonstrated need” for such a currency, as
central banks and private banks already operate trusted electronic payment systems that
generally offer fast, easy, and inexpensive transfers of value. These opponents argue that
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a CBDC in the form of individual direct accounts at the central bank would reduce bank
lending or inappropriately expand central banks’ role in lending. A portion of consumers
likely would shift their deposits away from private banks toward central bank digital
money, which would be a safe, government backed liquid asset. Deprived of this funding,
private banks likely would have to reduce their lending, leaving central banks to decide
whether or how they should support lending markets to avoid a reduction in credit
availability.”
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A/2: Regulation is good economically
Answer: Businesses and innovators thrive without regulation
Warrant: There are tons of federal regulations
Edwards, C. (2021, May 5). Entrepreneurs and Regulations: Removing State and Local
Barriers to New Businesses. Cato Institute. https://www.cato.org/policyanalysis/entrepreneurs-regulations-removing-state-local-barriers-newbusinesses#regulations-businesses
“Governments impose various sorts of regulations on businesses. Some regulations
are imposed across all industries, such as rules related to labor, accounting, safety,
environment, and advertising. Other regulations are specific to industries, such as
agriculture, energy, transportation, and financial services. Regulations are rules that
require actions or that restrict or ban actions. To comply with regulations, companies
must spend on equipment and procedures, must pay wages and benefits set by
government rules, and must hire experts to navigate all the rules. Regulations
consume the time and energies of business leaders, and they create barriers to
innovation and competition. Many regulations create benefits, but those benefits
should be considered against all the costs they entail. The federal government imposes
regulations on businesses related to occupational health and safety, environment,
wages and overtime, health and retirement benefits, family leave, workplace
harassment and discrimination, disability, immigration and employment eligibility, labor
unions, privacy, antitrust, truth in advertising, foreign trade, and many other areas. The
federal government imposes further regulations on specific industries. It has about 260
agencies that impose regulations, and there is overlap between the rules.49 A startup
with a new health app for smartphones, for example, may have to deal with regulations
from four different federal agencies.50”
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Warrant: Regulations are a major impediment to business activity
Edwards, C. (2021, May 5). Entrepreneurs and Regulations: Removing State and Local
Barriers to New Businesses. Cato Institute. https://www.cato.org/policyanalysis/entrepreneurs-regulations-removing-state-local-barriers-newbusinesses#regulations-businesses
“How important are regulations to small businesses? In a March 2020 survey, the
National Federation of Independent Business (NFIB) asked small business owners to rate
the importance of 75 different economic issues for their firms. After the cost of health
insurance, finding and retaining good employees, and taxes, the biggest issue was
“unreasonable government regulations.”55 The organization’s surveys since the 1980s
consistently find that regulations are one of the “most important problems” faced by
small businesses.56 Regular polls by CNBC also show that regulations are a top concern
of small businesses. In the fourth quarter of 2020, small business confidence plunged
to the lowest level since 2017.57 When asked which factors will have a negative effect
over the next year, 49 percent of small business respondents said government
regulations, which is up from 26 percent in the first quarter of 2020.58 The shutdowns
and restrictions of 2020 appear to have increased fears of government regulatory
power.”
Warrant: Regulations make scaling businesses hard
Edwards, C. (2021, May 5). Entrepreneurs and Regulations: Removing State and Local
Barriers to New Businesses. Cato Institute. https://www.cato.org/policyanalysis/entrepreneurs-regulations-removing-state-local-barriers-newbusinesses#regulations-businesses
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“The second regulatory disadvantage for startups is economies of scale in compliance.
To launch a startup, entrepreneurs need to learn an array of general business
regulations as well as regulations specific to their industry. They do not have in-house
experts to guide them, as large firms do. Regulations may require investments in
machinery, business processes, and compliance officers. Large firms can spread such
costs of compliance across a greater volume of sales. In a study for the National
Association of Manufacturers, economists Mark Crain and Nicole Crain measured
regulatory economies of scale. For businesses of different sizes, they estimated the
costs of federal regulations, including economic, tax code, environmental, health and
safety, and homeland security regulations. They found that the per employee costs for
small businesses (less than 50 employees) were 29 percent higher, on average, than
the costs for large businesses (more than 100 employees).67 In manufacturing, they
found that the per employee regulatory costs for small businesses were 152 percent
higher than the costs for large businesses.68 A 2017 Chamber of Commerce study
echoed these findings of relatively higher regulatory costs on smaller firms.69.”
Warrant: Regulation empirically hurts businesses as they scale
Aghion, P. (2021, February 3). Does regulation affect innovation? Study shows it does,
but there is a way out. ThePrint. https://theprint.in/opinion/does-regulationaffect-innovation-study-shows-it-does-but-there-is-a-way-out/597700/
““Discouraging productive firms from becoming larger is one “static” effect of the
regulation. However, a deeper, more dynamic problem might be that firms may be
reluctant to invest in growth-enhancing innovations when they face these higher
regulatory taxes. Furthermore, even larger firms face this tax on growth, so they might
invest less in research and development (R&D). Figure 2 shows that these innovation
effects might be happening in the data. The probability of innovating increases with firm
size, but there is an “innovation valley” just before 50 employee firms consistent with a
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discouraging effect. Moreover, the gradient of the innovation-size relationship flattens
after 50 employees, also suggesting a regulatory tax..”
Analysis: This argument is essential for the higher-level theoretical debate about the impact of
regulation. If you can paint a convincing picture about the effect of regulation writ large then
you will also have a convincing stance on regulation in the form of crypto
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A/2: Regulation is preferable to an outright ban
Answer: Crypto’s harms are irredeemable – a ban is preferable to regulation.
Warrant: Crypto is behind cybercrime
Manning, R. O. A. C. (2021, July 25). Bye-bye, bitcoin: It’s time to ban cryptocurrencies.
TheHill. https://thehill.com/opinion/cybersecurity/564696-bye-bye-bitcoin-timeto-ban-crypto-currencies
“I’ve never quite understood why cryptocurrencies are worth anything. Of course, the
untraceable payments are worth a lot to ransomware hackers, cyber criminals and
money launderers. But dollars, euros and yen are backed by nations’ respective
treasuries. If someone invents a cryptocurrency, any value is based solely on convincing
others it has value. But is it a usable means of exchange? International banking officials
say cryptocurrencies such as bitcoin are speculative assets, not sustainable, usable
money. Yet the epidemic of hugely disruptive ransomware attacks in recent months —
on JBS Foods, a major meat processor; on Colonial Pipelines, our critical infrastructure,
causing gasoline shortages for weeks; and on 1,000 or more U.S. businesses on July 4
— highlights the enormous risks. Moreover, hundreds of small towns, hospitals,
school districts and small businesses have been hit by the ransomware epidemic — all
enabled by cryptocurrencies. How should governments respond? Besieged with
cyberattacks, the Biden administration has been struggling with this question of
cybersecurity with few clear answers. Cyber offense still seems to beat cyber
defense.”
Warrant: Modern states do not need cryptocurrencies
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Manning, R. O. A. C. (2021, July 25). Bye-bye, bitcoin: It’s time to ban cryptocurrencies.
TheHill. https://thehill.com/opinion/cybersecurity/564696-bye-bye-bitcoin-timeto-ban-crypto-currencies
“How should governments respond? Besieged with cyberattacks, the Biden
administration has been struggling with this question of cybersecurity with few clear
answers. Cyber offense still seems to beat cyber defense. As the eminent economic
analyst Martin Wolf outlined in a recent Financial Times essay, the risks and chaos of a
wild world of unstable private money is a libertarian fantasy. According to a recent
Federal Reserve paper, there are already some 8,000 cryptocurrencies. It’s a new
mom-and-pop cottage industry. How should governments respond? Wolf argues that
central banks (e.g., the U.S. Federal Reserve) should create their own official digital
currencies — central bank digital currencies (CBDC) and make cryptocurrencies illegal.
I’ve been asking the same question: Who needs cryptocurrencies? Apart from the
nasty uses and wild speculative value swings, data mining to produce bitcoin is a
serious environmental hazard, using huge amounts of electricity by rows and rows of
computers.”
Warrant: Crypto is bad for the environment
Leedham, R. (2021, May 14). We need to ban Bitcoin now. Before it burns the world up.
British GQ. https://www.gq-magazine.co.uk/lifestyle/article/bitcoin-ban
“Where once Bitcoin was a funny internet curio, it is now legitimately a big deal, albeit
a big deal that answers to no one and has zero regard for the consequences of its own
actions. Case in point: Bitcoin mining – the process by which transactions are
legitimised and monitored – already consumes more electricity in a year than Sweden
or Ukraine, according to the University Of Cambridge’s Centre For Alternative Finance.
The real kicker? “At the moment, only about a fifth of the electricity used in the world’s
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data centres comes from renewable sources,” Rolf Skar, special projects manager at
Greenpeace USA, tells me. “And that’s not good enough.” So the more Bitcoin grows in
value, the more its already massive carbon footprint is going to mushroom. Other
cryptocurrencies, such as its chief competitor, Ethereum, either use or are
transitioning to a significantly less energy-intensive certification process called “proofof-stake”. Bitcoin could do the same, but has little incentive to do so.”
Warrant: Cypto is financially unstable
Leedham, R. (2021, May 14). We need to ban Bitcoin now. Before it burns the world up.
British GQ. https://www.gq-magazine.co.uk/lifestyle/article/bitcoin-ban
“Disregarding Bitcoin’s environmental impact and its criminal underbelly, you might
just look at the tenor of its news coverage and see a chance to make a quick buck. And
there’s the rub: that precise ethos is the only thing sustaining Bitcoin. But don’t take my
word for it. Craig Wright, Bitcoin’s claimed founder, said so himself to the Times: “The
price goes up because people are paying... but that doesn’t ever last forever. Old
Charles Ponzi did that one too.” The closest parallel to what a Bitcoin collapse would
look like is a smaller-scale version of the subprime mortgage crisis. You know, that
grand old time in 2007 when a bunch of genius bankers realised the debt-related
assets they owned had no real-world utility and were vastly less valuable than
previously assumed. And if the currency does find a way to stick around for the long
haul? Then the world’s central banks will have their means to prop up their economies
in a recession via stimulus considerably restricted.”
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A/2: Regulation has bipartisan support
Answer: Regulation will inspire political backlash
Warrant: Crypto Mining regulation is political toxic
Nikhilesh De, 1-19-2021, business reporter at CoinDesk with a focus on regulators,
lawmakers and institutions, "What the Crypto World Should Watch for in the
Biden Era," CoinDesk, https://www.coindesk.com/biden-inauguration-cabinetcrypto-sec-cftc-occ)SEM
Congress: Bringing back real-time payments Let’s get to the really interesting bits:
Senator Sherrod Brown (D-Ohio) is going to run the Senate Banking Committee for the
next Congressional session, and one of his focuses will be on real-time payments and
how to implement them, as well as in bringing the financially excluded onto payment
rails. An idea being tossed around is postal banking, where post offices (which are
plentiful) are able to provide certain financial services. Rohan Grey, a legislative adviser
who helped create the STABLE Act, said FedAccounts will likely receive a lot of attention.
Brown himself mentioned the concept during a virtual media availability. “The Fed will
administer, not subsidize, a no-fee account. It can be done online, it can be done at post
offices … you can get access perhaps at a small bank in your neighborhood,” he said of
the idea. One common perception around crypto is that proof-of-work networks like
Bitcoin are incredibly energy intensive and are primarily powered by oil or coal plants.
Industry participants say hydroelectric and other forms of renewable energy sources are
used instead. Either way, regulators like the New York Department of Financial Services
and CFTC are warning their regulated firms to be mindful of the environmental costs of
their services. Crypto miners in the U.S. in particular may see new requests or
regulations heading their way. The other major storyline to watch out for is how
exactly Congress will proceed in the coming weeks and months. We all saw the mob
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breach the U.S. Capitol Building in January, followed by several Republican Senators and
Representatives objecting to the acceptance of the certified Electoral College votes from
the states of Arizona and Pennsylvania. Several members of the Congressional
Blockchain Caucus gave speeches and voted against accepting the votes – essentially
disagreeing with consensus, to use a rough crypto analogy. Punchbowl News reported
that some Democratic lawmakers and aides are considering freezing the objectors out of
parts of the legislative process. This could mean that bills introduced by blockchain
proponents like Rep. Warren Davidson (R-Ohio), such as the Token Taxonomy Act,
might go nowhere if they’re introduced or reintroduced this year. Kristin Smith,
executive director of the Blockchain Association, said the “political tensions right now
are incredibly high,” and noted that “there’s currently a lot of pressure on Democrats
to stop working across the aisle with anyone who voted the other way” last week,
though she expects this to subside as time moves on. “The Democrats may have the
White House, the House and the Senate today but they won’t always be on that side of
things and they’ll want to work across the aisle when they’re in the minority as well,”
she said. “I’m hopeful we’ll return to seeing some bipartisanship.”
Context: Blockchain Association lobbying would make the situation toxic
Brian Fung, Washington Post, 9-11-2018 ["Get ready for Big Bitcoin: Cryptocurrency
industry opens a D.C. lobbying arm",
https://www.washingtonpost.com/technology/2018/09/11/get-ready-bigbitcoin-cryptocurrency-industry-opens-dc-lobbying-arm/?noredirect=on, 10-102021] Srikar T. S.
The price of bitcoin may be down, compared with last year's meteoric heights. But
industry officials aren't waiting for the next spike in investor demand to launch a charm
offensive targeting federal lawmakers and regulators who've taken an interest in
cryptocurrencies. Tech veterans and a number of high-profile cryptocurrency
companies on Tuesday said they are forming the Blockchain Association, the first fully
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fledged lobbying group in Washington representing entrepreneurs and investors who
are building off the technology behind bitcoin. Joining the initial push are companies
such as Coinbase and Circle, which operate some of the world's most popular virtual
currency exchanges, as well as the technology start-up Protocol Labs. Investors, such as
Digital Currency Group and Polychain Capital, are also among the founding members.
The group has already made its first hire: Kristin Smith, who was an aide to then-Sen.
Olympia J. Snowe (R-Maine) and went on to lobby on blockchain issues for
Overstock.com, the online retailer that in 2014 began accepting payments in bitcoin.
"I've been spending a lot of time doing a lot of the basic education work in this space,”
said Smith, who is expected to guide the trade group through its early steps. “I'm
excited to focus exclusively on these issues." Policymakers have been confronted in
recent months with an array of cryptocurrency issues as investors have flocked to
bitcoin and other virtual currencies. The technology on which they're based raises
novel questions about financial regulation in a digital age — and in some cases,
consumers have become the victims of scams that have attracted attention from state
and federal regulators. Congressional hearings on cryptocurrency and recent decisions
by the Securities and Exchange Commission have also highlighted bitcoin's and other
cryptocurrencies' growing profile.
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A/2: Effective Regulation
Answer: Crypto is not easy to regulate
Warrant: It is hard to draw lines around crypto assets
Kolhatkar, S. (2021, October 6). The Challenges of Regulating Cryptocurrency. The New
Yorker. https://www.newyorker.com/business/currency/the-challenges-ofregulating-cryptocurrency
“One securities lawyer I spoke with, Nick Morgan, who is a partner at Paul Hastings,
recalled that, around 2017, as a frenzy of initial coin offerings—a fund-raising strategy
for cryptocurrency that resembles an I.P.O.—was in full swing, a client came to his law
firm wanting to know what the S.E.C. thought about I.C.O.s, and whether the agency
considered digital coins to be under its purview. Morgan said, jokingly, that his first
question was, “What’s an I.C.O.?” He quickly learned that there was little S.E.C.
guidance available. “What would be useful for everyone to know is, what are the
characteristics of a digital asset that is not a security? It would be useful to draw that
line,” Morgan said. “I was a little hopeful, given Gensler’s technical background, that
he might be the person to say, ‘Here is the boundary of the S.E.C.’s jurisdiction, and if
you designed a token this way, that would be outside our jurisdiction.’ ” But, he
added, “I don’t think it’s going to happen.””
Warrant: The SEC has been unclear and confusing
Kolhatkar, S. (2021, October 6). The Challenges of Regulating Cryptocurrency. The New
Yorker. https://www.newyorker.com/business/currency/the-challenges-ofregulating-cryptocurrency
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“More recently, the S.E.C. has expressed interest in the workings of Coinbase, one of the
largest cryptocurrency exchanges, where people can buy and sell cryptocurrencies.
Coinbase went public earlier this year, and in June it announced plans for a product it
called Lend, which would have enabled owners of cryptocurrencies to loan them out
and be paid interest on the loans. On September 7th, Coinbase announced in a blog post
that the S.E.C. had threatened to sue the company over Lend, alleging, the post said,
that the offering involved a security. According to the company, its executives had
been “proactively engaging” with the S.E.C. for six months, to clarify the legal standing
of its projects, but it “didn’t get much of a response.” It also said that the S.E.C. had so
far refused to clarify whether it considered the act of lending cryptocurrency a
security, or whether the cryptocurrency itself was the security, and any other aspects
of its reasoning. (The S.E.C. said that it could not comment on issues involving specific
companies.) On September 17th, Coinbase announced that it was cancelling the Lend
program.
Warrant: The US regulatory environment will have trouble with crypto
Silverman, G. (2021, July 17). Why US regulation is failing the cryptocurrency test.
Financial Times. https://www.ft.com/content/e196014a-c5bc-4b2e-84555b5b8d878209
“The underlying difficulty is that US financial regulation is fragmented. There are
multiple federal banking and market authorities, with overlapping jurisdictions, plus
state regulatory systems. As Jamie Dimon, JPMorgan Chase’s chief executive, put it in
his annual letter to shareholders: “There is no one real authority that can co-ordinate
all the moving parts and bridge differences.” In the long run, this is not entirely a bad
thing. Checks and balances are as American as apple pie or junk bonds; having so many
regulators serves as protection against any one of them messing up. But this system has
its weaknesses. New products that are neither fish nor fowl in a regulatory sense can
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fall through the cracks. Crypto is hard to regulate because it is hard to define. While
true believers call cryptos currencies, US regulators view them differently. Bitcoin, for
instance, has been deemed a commodity. Other cryptos are seen as securities..”
Warrant: No agency has the authority or remit to regulate crypto
Silverman, G. (2021, July 17). Why US regulation is failing the cryptocurrency test.
Financial Times. https://www.ft.com/content/e196014a-c5bc-4b2e-84555b5b8d878209
“This resulting confusion helps explain why neither the SEC nor the Commodity
Futures Trading Commission is directly regulating crypto exchanges such as Coinbase.
No one has given them the job — a source of frustration for the regulators.
Congress, in its fashion, is on the case. Elizabeth Warren, the Democratic senator, wrote
to Gensler this month to ask whether the SEC “has the proper authority to close existing
gaps in regulation that leave investors and consumers vulnerable to dangers in this
highly opaque and volatile market”. Gensler’s response, due by July 28, will undoubtedly
be persuasive. But whether it will prod legislators to act quickly is another matter. If
history is any guide, Congress will wait for things to fall apart before deciding how
they should have been put together in the first place.”
Warrant: Administrative responses most often have to wait for a major crisis
Silverman, G. (2021, July 17). Why US regulation is failing the cryptocurrency test.
Financial Times. https://www.ft.com/content/e196014a-c5bc-4b2e-84555b5b8d878209
“The resulting impasse is exacerbating anxieties that regulators are falling further
behind the curve. The crypto craze reminds many Wall Street veterans of the
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unregulated rise of credit default swaps in years leading to the financial crisis. Like
crypto, CDS were hard to characterise, being a form of insurance that was not
regulated as such, and were seen by their advocates as being too cool to be overseen
by mere bureaucrats. “It took a crisis to focus our attention on products like CDS,” said
Sarah Hammer, managing director of the Stevens Center for Innovation in Finance at
the University of Pennsylvania’s Wharton School. “In some ways, crypto is more
challenging than derivatives because it falls into many different regulatory laps.”.”
Analysis: With so many cryptocurrencies operating differently in different locations, it would be
extremely difficult for the government to determine how best to handle them.
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A/2: Energy Waste
Answer: Cryptocurrency can be good for the environment.
Claim: Cryptocurrencies can benefit the environment
Cooling, Sam. “UN Report Says Crypto Technologies Represent 'a Limited Environmental
Impact'.” Yahoo!, Yahoo!, 8 July 2021, https://www.yahoo.com/now/un-reportsays-crypto-technologies-145935885.html.
“UN experts have stated they believe cryptocurrencies and the blockchain technology
that underpins them can play an important role in sustainable development, and may
actually benefit the environment. The United Nation’s report was commissioned in
response to the widespread environmental concerns and energy-consumption criticisms
surrounding crypto, with Bitcoin (BTC) mining taking much of the flak. The UN admitted
that “cryptocurrencies are still in their infancy, and there are still many technical and
political challenges to be overcome”. This bodes well with the report optimistic about the
future of the technologies. “The more we experiment, the more we learn about the
technology,” said Minang Acharya, a UN blockchain expert. “This is likely to improve our
UN-wide knowledge on blockchain, our understanding of the environmental and social
implications of mining operations, and improve our chances of coping with any problems
the technology may bring in the future.””
Warrant: Cryptocurrencies help the environment by making processes more transparent,
creating finance around the climate, and by creating clean energy markets
Cooling, Sam. “UN Report Says Crypto Technologies Represent 'a Limited Environmental
Impact'.” Yahoo!, Yahoo!, 8 July 2021, https://www.yahoo.com/now/un-reportsays-crypto-technologies-145935885.html.
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“The UNEP’s DTU Partnership (comprising the UNEP, the Technical University of Denmark,
and the Danish Ministry of Foreign Affairs), have stated there are three main areas where
blockchain can accelerate climate action – transparency, climate finance, and clean
energy markets. Blockchain solutions could provide a trustworthy way to show how
nations are taking action to reduce their impact on the climate. Climate financing is an
exciting use of blockchain to fight climate change, if carbon markets are scaled up then
investments that contribute to slowing the rate of climate change could be boosted,
facilitating businesses and industries to transition into low-carbon technologies. There is
also an important role for blockchain to play in accelerating the adoption of renewable
energy sources such as wind and solar power. As these sources are, by their nature,
intermittent and decentralised, new forms of energy markets are needed. Blockchain
provides a means of making these solutions marketable.”
Answer: Cryptocurrencies are reducing their carbon footprint.
Warrant: Proof-of-stake technology has successfully helped reduce the carbon footprint of
cryptocurrencies
Cooling, Sam. “UN Report Says Crypto Technologies Represent 'a Limited Environmental
Impact'.” Yahoo!, Yahoo!, 8 July 2021, https://www.yahoo.com/now/un-reportsays-crypto-technologies-145935885.html.
“The UN admission that blockchain and cryptocurrencies are in their infancy is right. And
as the industry continually pushes and innovates, cryptocurrencies and blockchain
technologies will become increasingly efficient in energy consumption and savings. Proof
of Stake (PoS) technology is already reducing the carbon footprint of the industry. In a
huge innovation for the industry, Ethereum 2.0 presents a move towards PoS transaction
verifications, and the Ethereum Foundation suggest this could reduce Ethereum’s
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transactional energy usage by 99.5%. This follows efforts from within the community,
such as the creation of a Crypto Climate Accord in April.”
Warrant: The carbon footprint of mining has declined due to reduced mining in China
Sigalos, MacKenzie. “Bitcoin Mining Isn't Nearly as Bad for the Environment as It Used to
Be, New Data Shows.” CNBC, CNBC, 20 July 2021,
https://www.cnbc.com/2021/07/20/bitcoin-mining-environmental-impact-newstudy.html.
“For years, bitcoin critics have maligned the world’s biggest cryptocurrency for polluting
the planet. But new data from Cambridge University shows that the geography of mining
has drastically changed over the last six months, and experts tell CNBC this will improve
bitcoin’s carbon footprint. China’s big crypto crackdown this spring set off a chain
reaction in the mining world. For one, it took half the world’s bitcoin miners offline
practically overnight. Fewer people mining has meant less machines running and less
power being consumed overall, which slashed bitcoin’s environmental impact. Beijing’s
new crypto rules also permanently took a lot of older and more inefficient gear offline.
And crucially, China shutting its doors to crypto mining has set off a massive migration.
Miners are now heading to the cheapest sources of energy on the planet, which more
often than not are renewable.”
Analysis: Cryptocurrencies may have an initial energy cost, but they can enable behaviors that
will reduce emissions in the long-term. Furthermore, the carbon footprint for cryptocurrency is
declining quickly in response to public pressure.
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