Crypto-friendly rules threaten national security: Representative Sean Casten

During a March 5 hearing of the House Financial Services Committee, US Representative Sean Casten, an Illinois Congressperson, argued that “crypto-friendly rules” threaten US national security.

The lawmaker made the remarks while debating H.R. 1716, the “Taiwan Conflict Deterrence Act of 2025,” accusing President Donald Trump and Elon Musk of dismantling Anti-Money Laundering and financial surveillance laws. Casten added:

“They are pushing crypto-friendly rules that would make it essentially impossible to determine the source of funds that are being used to be transferred. I want to point out that 100% of the ransomware attacks in the United States are funded by crypto.”

“And yet my colleagues would make it easier to use crypto, reduce the oversight, and make it easier to traffic money,” the lawmaker continued.

Pro-crypto Congressperson Warren Davidson responded to Casten, stating, “[…] When we hear Mr. Casten throw out all sorts of things, we get it — he wants a surveillance state.”

Davidson added that the United States should not become like China to deter the South Pacific country and urged lawmakers to abide by the precepts outlined in the US Constitution.

Related: Crypto firms rally behind Ted Cruz to block DeFi broker rule

The creeping threat of the surveillance state

Former National Security Agency (NSA) contractor-turned-whistleblower Edward Snowden warned that the NSA was days away from taking over the internet in April 2024.

The whistleblower cited expansions to section 702 of the Foreign Intelligence Surveillance Act (FISA) and the vague language used to describe an “electronic communications surveillance provider.”

According to Snowden, this could potentially compel nearly every individual, including office workers or contractors associated with service providers, to act as surveillance agents for the US government.

In November 2024, Snowden sounded the alarm on centralized blockchains and artificial intelligence, calling for decentralization as a bulwark against the threats posed by concentrations of digital power.

These warnings were echoed by David Holtzman, a former military intelligence professional and chief strategy officer of the Naoris decentralized security protocol, in December 2024.

Holtzman argued that the surveillance threats posed by AI are unparalleled in human history and said that decentralization was key to preventing a rising authoritarian threat.

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