What the NYT and Washington Post Op-Eds Get Wrong About Crypto

It’s a season of nonsense in crypto politics, and we’re starting to see hyperbolic and heated commentary condemning crypto in two major newspapers in the US.

First, New York Times columnist Paul Krugman, who has long been a critic of the impact of technology on the economy, published an op-ed about the role of cryptocurrencies in the election, in which he argued that cryptocurrencies are just “tech jargon and libertarian nonsense” that has only gotten stronger over time. He also said that he doesn’t believe cryptocurrencies solve any problem that “can’t be solved more easily and cheaply by other means.” Over the years, I’ve sat in on many meetings where skeptics have asked cryptocurrency advocates this question and never heard a clear answer.

This view was so misunderstood by the Washington Post editorial board that they decided to write a love letter to SEC Chairman Gary Gensler, with scant evidence. According to the Washington Post editorial board, “Cryptocurrency is a volatile asset with no intrinsic value. It is used almost exclusively for speculation or for shady activities like selling drugs or collecting ransoms, and the anonymous nature of crypto accounts is useful for these purposes.”

And today, not surprisingly, another opinion piece in The New York Times warns us all: “Don’t be fooled.”

Given the high stakes of this election for crypto and America, it’s more important than ever to vigorously correct misinformation about crypto. As Senator Daniel Patrick Moynihan famously said, “You’re entitled to your opinion. But you’re not entitled to your facts.” Here are some key facts:

First and foremost, only a tiny fraction of crypto is used for illicit activities, far less than what we see in traditional finance, which can account for up to 5% of global GDP according to the United Nations. According to analytics firm Chainalysis, money laundering accounts for less than 0.5% of all crypto transaction flows, and that has been steadily decreasing over time. Even as crypto usage increases in 2023, the amount of money laundering in crypto fell from $31.5 billion in 2022 to $22.2 billion in 2023. The sheer amount of illicit activity is unacceptable, but singling out crypto as the bad guy is both wrong and exhausting.

Additionally, cryptocurrencies have many important uses. Crypto for payments has revamped the stablecoin, a dollar-pegged product with a total market cap of over $160 billion. Crypto is used for election prediction markets like Polymarket, which even New York Times reporters follow for insights. It is also used to find better systems for real-time trading through decentralized finance and billions of dollars in remittances between the US and Mexico alone.

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Claims that Chairman Gensler is just another well-intentioned regulator focused on passing crypto-related regulations are similarly false. In reality, Chairman Gensler has aggressively fought efforts to pass crypto-related legislation and reversed his stance that he needed legislative authority to regulate crypto in 2021. In doing so, Chairman Gensler has engaged in political warfare against Democrats on Capitol Hill, the crypto industry, and even his colleagues in the Biden Administration. By playing into the SEC’s hands, the Washington Post editorial board has fallen for a confidence trick by a politician dressed in regulatory garb.

Even the SEC has now agreed that neither BTC nor ETH are securities, and Democrat-appointed judges have also disagreed with the SEC Chairman’s claim that the law is clear. Every other major developed country and trading bloc, from Japan and the United Kingdom to the European Union, has responded to the new questions raised by crypto by introducing new regulations and legislation. But in the US, the SEC has decided to stick its fingers in its ears, the government equivalent, and yell at companies that they are lawless. This is unbecoming of any regulator, and should be something the editorial board should despise – not praise. The truth is that crypto is here to stay, and the question on the table is whether the US will say goodbye as the next wave of innovation heads offshore.

The crypto industry has engaged in positive, open dialogue about sensible legislation and has engaged in good faith with policymakers. It’s been over a year and a half since the crypto winter of 2022. Claims that crypto will disappear in six months have been made so frequently and so baselessly that they’ve begun to sound like a little boy crying wolf.

It is long past time for the US government to do what all of its peer countries are doing and come up with workable bipartisan legislation and regulation for crypto. Failure to do so has harmed American competitiveness, the crypto industry, and ordinary consumers. Worse, the SEC Chairman’s largely press-driven campaign has lent credence to Donald Trump’s arguments that all politics is baseless and hypocritical, thereby undermining Democrats’ arguments that they stand for fair trials and the rule of law.

But to get to the point of legislating, it’s important that not only crypto advocates like us, but also crypto skeptics, have a basic understanding of what crypto really is right now. Hopefully, pointing out its numerous errors will prompt the Washington Post editorial board and Prof. Krugman to put their biases aside and really look at the reality of crypto. Because without a doubt, crypto is here to stay.

Note: The opinions expressed in this column are those of the author and do not reflect the opinions of CoinDesk, Inc. or its owners and affiliates.