Ryan's Open Letter

Opens March 23rd 2023 saying the industry is polarized by an uncanny-valley effect despite ideological closeness, so when someone reflects the industry's ethos he wants to call it out.

Reads an open letter Ryan Selkis of Messari wrote to the House Financial Services Committee in response to the White House report calling cryptocurrencies useless.

The letter to Congressman McHenry and Congresswoman Waters notes Messari employs over 100 Americans across 30 states with no debt and pays taxes, but that vague adverse regulation risks forcing high-paying jobs overseas.

Messari is the kind of business policymakers claim to want, educating users and preparing research reports, and a model for Hester Peirce's token Safe Harbor.

Argues policies hindering the industry push innovation overseas as a matter of economic competitiveness and national security, like the 50-billion-dollar semiconductor-manufacturing fix.

Makes the first point that digital assets are a one-trillion-dollar market grown from a single white paper, and that the US risks ceding its technical edge to Europe and Asia.

Calls the claim that the industry revolves around stealing from investors or money laundering quantifiably false and defamatory, since well-regulated apps provide capital infrastructure and dollar remittances to Venezuela and Ukraine.

Compares it to the early internet where Wikipedia, Google Maps, and YouTube came years after the infrastructure matured, noting crypto crowdfunds rare-disease drug discovery and supports the creator economy.

Cites pro-democracy Hong Kong voices using a digital-asset platform to preserve 4,000 Apple Daily articles from CCP censorship, plus wireless, IP-rights, and identity uses beyond finance.

Acknowledges the industry has a steep learning curve, is fragmented with no unifying voice, and that the 2022 fraud might have been avoided with a coherent US framework.

Contrasts FTX's fraud with good-faith US businesses, noting Coinbase, Kraken, and Circle have been FinCEN-regulated for a decade and Paxos and Anchorage hold trust and banking charters.

It is a misstatement to call US infrastructure companies unregulated, since FTX gained share by flouting US law from offshore while compliance hindered US competitors.

Interjects that it is not a lack of regulation but an inability to apply the framework, since Coinbase talked to the SEC 30 times over two years and filed an IPO S1 before getting a Wells notice.

The second point is that the SEC's characterization of most digital assets as unregistered securities is overreaching regulation-by-enforcement with no real way to register, and proposed custody rules make compliance impossible.

Innovators domicile in Europe or Asia where MiCA, the UK's four categories, and Singapore's Payment Services Act differentiate token types, unlike the SEC's arbitrary approach.

The SEC blocked Grayscale's GBTC from converting to an ETF after approving equivalents, decimating 850,000 investors with a 7-billion-dollar impairment exceeding FTX's damage.

Reaches the third point that the industry is systematically debanked and scapegoated for the Silicon Valley Bank run, which was poor interest-rate management rather than crypto.

Silvergate ran an orderly liquidation without a federal backstop despite a 12-billion-dollar 90-day run, while Signature Bank was seized for political targeting per board member Barney Frank to send an anti-crypto message.

Messari itself was rejected by banks solely for serving digital-asset customers, and that the full-reserve bank Custodia was denied a charter as systemically risky despite reserves in Treasury bills.

Interjects that fractional-reserve banks like Signature and SVB fail while full-reserve Custodia, which solves stablecoin risk, is absurdly called systemically risky.

Presents the first solution of stablecoin legislation, arguing fully-reserved dollar stablecoins extend dollar dominance without a CBDC's privacy risk, and recounts China's CBDC lead presenting 200 million users at the Swiss ambassador's house.

Warns China's Tencent-wired CBDC could become Africa's default payment system if the US does nothing, while well-regulated stablecoins create new demand for US government debt.

Presents the second solution of custody legislation like the Digital Commodities Consumer Protection Act and the Responsible Financial Innovation Act, empowering the CFTC over non-security spot markets.

Presents the third solution of safe harbors for creators, noting Bitcoin, Ethereum, and dollar stablecoins are 75 percent of the market, so a risk-weighted approach like Hester Peirce's token Safe Harbor and McHenry's Clarity for Digital Tokens Act makes sense.

The executive branch conducts a silent war on crypto, publicly saying come-and-register while privately running Choke Point 2.0 and denying Custodia a master account, so the legislative branch must restrain the overreach.

It is not hard internationally, having negotiated operating clarity with Switzerland and Japan's FSA for Ethereum, but that in the US nobody knows the rules and basic banking and tax clarity are denied.

Calls the White House report saying the industry accomplished nothing malice, not relearning financial-industry mistakes, while 3 billion people are cut out, remittances cost 6 percent, and microfinance over 100 percent.

Urges every leader to do what Ryan did and write letters putting their voice on the line, since bureaucrats and White House reports are the only voices legislators currently hear.

Calls on Kraken, Coinbase, and ConsenSys employees to push their bosses to write open letters despite being competitors, given a small window to get it done before the US is left behind.

Calls on law firms that collected hundreds of millions in fees from legal uncertainty to go on the record about how hard basic things are, or the industry gets shut down and a CBDC nobody wants arrives.

Urges everyday listeners to write their representatives, support crypto business, and become single-issue voters, since it is not a left-right thing but a crypto thing.

Closes saying he will keep speaking before Congress and advocating sensible legislation but cannot do it alone, admiring Ryan Selkis for putting himself out there when he did not have to.