Tuesday’s crypto hearing before the United States Senate Committee on Banking, Housing and Urban Affairs also included a call for stricter regulations on cryptocurrency miners.
Addressing the committee, Professor Angela Walch claimed that miners held “meaningful power” over the way blockchain networks operate. According to Walch, miners can exploit their role of transaction ordering which could become a “major issue” for cryptocurrencies, as reported by Law360.
In stressing the point, Professor Walch likened the miner extractable value (MEV) paradigm where miners earn more profits from ordering transactions in a certain way as being akin to a “bribe.” As such, Walch called for “greater scrutiny” on the activities of miners given their role as “intermediaries” in the multi-billion-dollar crypto ecosystem.
Coin Center’s executive director Jerry Brito countered Walch’s characterization of crypto miners as intermediaries, instead likening their role to that of internet service providers. As such, Brito argued for miners to be treated like ISPs without the need for burdensome regulations like money transmission laws.
Brito highlighted places like New York where the state’s stringent Bitlicense does not include crypto miners as they are not deemed “financial intermediaries.”
Walch was not the only one to cast a seemingly jaundiced glance at crypto miners. Senator Elizabeth Warren used terms like “shadowy” and “faceless” to describe software developers and miners.
With the U.S. identified as a likely destination for miners relocating out of China due to the latter’s crypto mining crackdown, the crypto mining space in America may be in for more serious scrutiny.
Most of the regulatory talk regarding U.S. miners has been about environmental concerns, with some North American mining firms expressing their commitment to environmentally sustainable operations.