Aug 30, 2022 - Economy & Business

Rep. Tom Emmer sees crypto as a means to open opportunity

Photo illustration of Rep. Tom Emmer with abstract shapes.
Photo illustration: Gabriella Turrisi/Axios. Photo: courtesy of Rep. Tom Emmer's office

Minnesota's Rep. Tom Emmer wrote to Treasury Secretary Janet Yellen on August 23 to express his concerns about the sanctioning of privacy protocol Tornado Cash, an open source piece of self-executing software that no one controls.

Driving the news: Axios reached out to Rep. Emmer, who serves on the House Committee on Financial Services and as Chairman of the National Republican Congressional Committee, to discuss his enduring interest in cryptocurrency.

Catch up fast: Emmer previously drew crypto denizens' attention when, last December, he tweeted just two letters: "gm".

  • At that time, NFTs were just entering into the national conversation, and enthusiasts were fond of tweeting the abbreviation for "good morning" as a way of showing digital collectibles were an upbeat and friendly culture.

What he's saying: "Technology is neutral, and the expectation of privacy is normal," Emmer wrote in his letter, related to the Tornado Cash action.

In an interview with Axios, he calls the ability to transact with privacy paramount. And he argues that Tornado Cash is just a way for people to transact privately.

  • "Cash is king when it comes to bad actors, but we don't sanction the suitcase. We figure out who's carrying it on the one end and who's receiving it on the other end," he says.
  • "You can give up so much of your liberty and your privacy that you literally become a prisoner of those you expect to protect you. That's not the way this country was designed."

Brass tacks: Most politicians talk about reducing the risks of crypto, but Emmer talks about permitting risk.

  • "It's related to capital formation. For me, what's supposed to make this country better than everywhere else is — I don't have to know someone to be someone," he says.
  • "Are we going to create an environment where people make their investment right here in the United States, and they grow these opportunities here, or are we going to play the I'm-afraid-of-what-I-don't-understand? game."

Emmer is trying to get his colleagues to see his view that this is about opportunities for Americans.

  • "I don't want to see another Sam Bankman-Fried moving down to the Caymans or the Bahamas. I want him here," he says. "I want him in this country."

The partisan divide: Emmer says he first got interested in crypto in 2015 or 2016 and spent a long time talking to his colleagues behind the scenes. At first, everyone was against it, he says.

  • As others have noted, crypto has gradually started to seem like a Republican thing in the last couple years. Emmer can't really explain it.
  • To be sure, a number of progressives and senior Democrats have embraced the crypto industry, but the issue has divided the left. Emmer's directed his criticism at the party's most vocal critic.
  • "What in God's name is going on with Elizabeth Warren?" he says.
  • The Massachusetts senator has been particularly skeptical of bitcoin and cryptocurrency during the boom, focusing on concerns around consumer protection and environmental issues.
  • “Cryptocurrencies are highly volatile assets that offer few, if any, protections to retail investors," she recently wrote to fellow senators in an effort to draw support for regulatory changes that would cut Wall Street’s link to the crypto industry.

While Emmer has always understood Warren as an advocate for regular people, he argued, "Her actions are protecting the existing banking structure and the big guys."

Of note: Emmer says he doesn't want to make the issue a win for his party. "I feel that this cannot be partisan," he says. "This is literally about looking at America and opportunities for Americans."

What he's watching: In the immediate term, Emmer would like to see a safe harbor for crypto entrepreneurs and some room to breathe around taxation and new crypto enterprises.

  • Bigger picture, he wants updated definitions of cash, commodities and securities, written with a digital economy in mind. "And don't use the Howey Test, It's great for lawyers, but you don't have to create full employment for them," he says.

The bottom line: Emmer supports protecting consumers and countering fraud, but, from the start, in Emmer's view elected officials have fixated too much on bad actors in the space.

  • "If you try to take all risk out of this stuff, well, you're going to take away a lot of the opportunity. And that's not what made this country great."
  • "It can either happen here in this country or it will happen somewhere else," he said.
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