Last week the Federal Deposit Insurance Corporation (FDIC) announced that it had issued cease and desist letters to five blockchain-related companies, demanding that the companies "cease and desist from making false and misleading statements about FDIC deposit insurance" and instructing the companies to "take immediate corrective action." The FDIC alleged that each company made false and misleading statements indicating that certain cryptocurrency products or accounts were FDIC insured, with one company alleged to have registered a domain name suggesting affiliation with the FDIC.
This week, U.S. Rep. Tom Emmer published a letter to Treasury Secretary Janet Yellen asking for clarification on the Office of Foreign Assets Control's (OFAC) recent sanctions against the cryptocurrency mixing service Tornado Cash. Emmer described the sanctions as the "first of their kind" in that OFAC sanctioned the protocol's smart contracts rather than a natural person or entity. In his letter, Emmer raised due process and privacy concerns, writing that "the sanctioning of neutral, open-source, decentralized technology presents a series of new questions, which impact not only our national security but the right to privacy of every American citizen." This letter comes just weeks after the arrest in the Netherlands of a tech developer allegedly involved with Tornado Cash.
In a press release published last week, leaders of the House Energy and Commerce Committee announced that they had sent letters to four U.S.-based cryptocurrency mining companies, seeking further information on the environmental impact and energy consumption of proof-of-work (PoW) mining. The letter raises concerns regarding the effect of mining operations on both climate change and local power grids. According to the letter, "[w]hile blockchain technology is emerging as a potentially important tool in fighting climate change, increasing demand on the grid and burning more fossil fuels to power PoW cryptomining facilities only serves to undermine the potential climate benefits of blockchain technology and hold us back from achieving our climate pollution reduction goals." The companies have until Sept. 17 to respond to the committee's requests for information.
For more information, please refer to the following links:
- FDIC Issues Cease and Desist Letters to Five Companies For Making Crypto-Related False or Misleading Representations about Deposit Insurance
- GOP Rep. Questions Treasury On Tornado Cash Sanctions
- Tom Emmer Letter to Janet Yellen re Tornado Cash Sanctions
- Tom Emmer Twitter: Letter to Janet Yellen re: Tornado Cash Sanctions
- Rep. Emmer demands an explanation of OFAC's Tornado Cash sanction from Sec. Yellen
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