Durbin Raises Questions About Cryptocurrency On Senate Floor

Durbin: Crypto is unstable, untraceable, and pumping untold tons of carbon into the atmosphere

WASHINGTON – In a speech on the Senate floor today, U.S. Senate Majority Whip Dick Durbin (D-IL) raised questions about cryptocurrency and the dangers it poses to personal finances. Durbin began his speech by highlighting various celebrities who have promoted cryptocurrency companies, including NBA star LeBron James and comedian Larry David, in commercials during the Super Bowl. During these commercials, LeBron James promoted Crypto.com, a cryptocurrency exchange based in Singapore, while Larry David promoted FTX, a crypto exchange company headquartered in the Bahamas.

Durbin said, “So how exactly can these exchanges—that most Americans have never even heard of—afford to shell out tens of millions of dollars on Superbowl ads? Better yet, why?  Last week, NPR ran a story that helped answer my question: You see, these crypto companies weren’t simply promoting their products, they were trying to create a veneer of credibility. These Super Bowl ads were high-stakes attempt to convince hard-working Americans into investing in a volatile, unwieldy, and poorly regulated asset class: Cryptocurrency. Unfortunately, it seems to be working.”

During his speech, Durbin highlighted Michelle Milkowski’s story, a first-time investor who decided to invest in crypto after watching the Super Bowl ads. Just three months after the Super Bowl, she was down about $8,000.

“It’s fortunate that Michelle was able to cut her losses, but for the majority of Americans—who cannot even afford an $1,000 emergency—losing $8,000 in three months is a disaster. That’s the difference between paying your rent and living on the street,” Durbin continued.

Durbin then spoke about the dangers of cryptocurrency, and highlighted Bitcoin, the most popular digital asset that has lost roughly two-thirds of its value since November. The cost of one Bitcoin fell from $68,000 in November 2021 to under $20,000 last month.

“If you’re a retail investor with money to invest, and you want to try your hand at the crypto casino: grab your chips,” Durbin said. “But when we’re talking about an industry that has shed hundreds of billions of dollars, it’s time for caution… With cryptocurrencies like Bitcoin, there is no such transparency. They are decentralized, illiquid, and highly speculative.  Where are the disclosures?  Where are the consumer protections? In many cases, there are none. Instead of encouraging working families to risk their hard-earned cash into a remarkably unstable investment, let’s pump the brakes on this rocket to the moon.”

Last week, Durbin and U.S. Senators Elizabeth Warren (D-MA) and Tina Smith (D-MN) requested answers from Fidelity Investments on their decision to allow 401(k) plan sponsors to offer plan participants exposure to Bitcoin. Fidelity is one of the largest 401(k) providers with around 40 million individual investors and around $11.3 trillion in assets under administration. In the letter, the Senators raised various concerns about potential risks and financial dangers posed by digital assets like Bitcoin.

“A 401(k) account is a vehicle that tens of millions of Americans rely on to retire in dignity.  And during this period of economic uncertainty, I can’t think of any reason to expose retirement savers to this level of risk. As we all saw on Super Bowl Sunday, there is no shortage of options for people who want to invest in crypto. And my hope is that Fidelity will live up to its name and meet that standard by reversing this decision,” Durbin said.

Durbin concluded his speech by addressing the huge energy consumption by cryptocurrency. Seven of the largest Bitcoin mining companies consume enough energy alone to power every single home in Houston. 

Durbin concluded, “When celebrities like Larry David are hawking an asset class that is unstable, untraceable, and pumping untold tons of carbon into the atmosphere, we should all have the good sense to step back and wrap our heads around this trillion dollar industry that is not even old enough today to drive a car… Yet, we've got to tell the American people when it's [cryptocurrency] advertised, when it's available, you've got to be careful, particularly when it comes to people with limited assets, people with an adverse situation when it comes to risk, and people who are putting literally their savings and their retirement on the line with these investments.”  

Video of Durbin’s floor speech is available here.

Audio of Durbin’s floor speech is available here.

Footage of Durbin’s floor speech is available here for TV Stations.