Cryptocurrency Skeptics Hope to Heed Regulators

Cryptocurrency Skeptics Hope to Heed Regulators

The crypto economy has been torn to shreds in recent months as the value of the sector has dropped by hundreds of billions — © AFP/File Justin TALLIS


Cryptocurrency critics, including economists and researchers, will convene this week in London and online to deliver their message to regulators about a booming but volatile sector.

A number of governments have raised concerns about cryptocurrencies, but organizers of the first Cryptocurrency Policy Symposium say they hope the event will spark a much more “critical discussion” in the sector.

“There are so many crypto conferences being held, but they are funded by the crypto industry,” said Martin Walker, co-organizer.

“The goal is to dispel some of the myths created by the crypto industry and get politicians to start asking the right questions.”

But Walker, a banking IT expert, is quick to dismiss claims that Monday and Tuesday’s event is a “cryptocurrency-fighting conference.”

Instead, he says it’s a chance to hear the critical voices of financial bubble experts, researchers who have assessed the industry’s carbon footprint, and engineers who question the effectiveness of decentralized technologies.

“We have regulators from all over the world,” he said.

Nearly 1,000 people have signed up to watch the online conference, and UK officials are expected to attend live in London on Tuesday.

The conference comes at a time when the price of bitcoin has fallen from a peak of nearly $69,000 last October to around $20,000.

Particular attention will be paid to the risky nature of the highly volatile and poorly regulated market for retail investors.

– Uninformed users –

Many central banks and financial market regulators are warning about the dangers associated with cryptocurrencies.

But due to the lack of a clear legal framework, users are rarely informed about their investments, crypto critics say.

The collapse of cryptocurrency investment platform Celsius left clients desperate and unable to return investments, which sometimes included life savings.

The firm faced growing problems until it froze withdrawals in mid-June and a lawsuit revealed it owed its users $4.7 billion.

“People didn’t understand that their money wasn’t safe and still don’t understand why they can’t get it back,” said Amy Castor, a respected freelance journalist and one of cryptocurrency’s most vocal critics.

“We wanted our voice to be heard because it is important for regulators to understand the risks, how cryptocurrencies work, the fraud inherent in them, so they can do more to protect retail investors (and) the public,” she said.

Castor, who used to work in the cryptocurrency media, rose to prominence during the 2017 price spike and subsequent crash for her criticism of the so-called “stablecoin” Tether.

Tether’s price is pegged to the US dollar, but its cash flow remains unclear.

“The problem is that the cryptocurrency has become so big that now a lot of money is spent on lobbying … to support politicians,” Castor added.

– A critic is not a hater –

In the United States, some elected officials have proudly shown support for the sector, especially at the local level.

The mayors of Miami and New York have said they want to make their cities crypto capitals, and municipality-specific currency projects are in various stages of development.

“Officials are talking about the benefits of cryptocurrencies,” said Tonantzin Carmona, a researcher at the Brookings Institution.

“They focus on what good this technology can bring and ignore the real risks.”

In March, Carmona published a study on the potential danger posed by mayors’ enthusiasm for cryptocurrencies.

She was afraid of being attacked on social media, but instead says her arguments were supported by a small community of crypto-skeptics who helped her understand that she was not alone.

“There is a difference between a hater and a critic,” she said.

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