Senator Elizabeth Warren Backtracks On Her Aggressive Anti-Crypto Stance

The shift comes as cryptocurrency increasingly emerges as a political priority in the US election campaign.

Elizabeth Warren Signals Softer Crypto Approach

The Senator's debate with rival aspirant John Deaton on Tuesday sparked speculation on whether Elizabeth Warren is rethinking her approach to the growing industry. The current Massachusetts Senator, who has often criticized cryptocurrencies for their potential to enable illicit activities and evade regulation, took a more balanced position this time.

“I'm all for having a crypto system if people want to buy and sell crypto. All I want is for them to follow the same rules as everyone else,” Warren expressed.

This statement reflects a significant departure from her prior rhetoric, which has often focused on the risks and downsides of crypto. While Warren emphasized the need for regulation and consumer protections, her openness to the idea of a functioning crypto market caught many by surprise.

The remarks came as Warren clashed with John Deaton, a prominent attorney and advocate for the crypto industry. Deaton highlighted Warren's past efforts to regulate or outright ban cryptocurrencies and called her out for previous attempts to stifle the industry.

“It's hardly surprising that industry players would back a pro-crypto candidate when you've tried to ban them,” Deaton said.

Warren, however, quickly responded by accusing Deaton of having financial ties to the crypto industry. She claimed that “90% of Deaton's campaign” was funded by the crypto sector, suggesting this could compromise his integrity if elected.

“If John Deaton goes to Washington, his crypto buddies are going to want a return on their investment,” said Warren.

Taken together, the debate displays the deep ideological divide between the Republican and Democrat candidates. Specifically, while Warren focused on enforcing stricter rules and transparency, Deaton emphasized the potential benefits of supporting crypto innovation.

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Deaton did not hold back in his criticism of Warren's stance, both in the debate and in his wider advocacy efforts. He pointedly said that Senator Warren should attack inflation the way she attacks crypto. He hinted that her efforts to curtail the industry have distracted from other pressing economic issues.

In a light-hearted but sharp comment, Deaton also mentioned his role in helping Chris Larsen, co-founder of Ripple, donate XRP to Vice President Kamala Harris, Warren's candidate of choice.

“Madam Vice President, if you're watching, you're welcome,” Deaton quipped.

This was an allusion to the irony of supporting a candidate with links to Warren despite her anti-crypto history. It remains to be seen whether this marks a full pivot for Warren or simply a strategic recalibration. Galaxy's head of Research, Alex Thorn, said Warren showed consistency in her remarks.

“No warren's being consistent. May seem reasonable when she says same rules as the banks, but she means applying BSA compliance to non-custodial entities like wallets, software devs, smart contracts, miners, validators, which is effectively a ban on blockchain networks themselves,” Thorn commented.

Others like Caitlin Long, Custodia Bank founder, said Warren is okay with big banks jumping the Federal Reserve's line. Nevertheless, her position seems to have evolved. Warren's statement, “I'm all for having a crypto system,” as long as it adheres to banking rules and consumer protections, suggests she is not abandoning her regulatory goals.

Instead, she may recognize cryptocurrency's growing importance in the global economy and adjust her approach to focus more on accountability rather than outright opposition.

Deaton's closing remarks reflected this shift as well, noting that Warren was “not very anti-crypto tonight.” The debate has raised new questions about the future of cryptocurrency regulation in the US as the November elections approach.

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