Dear U.S. Congressional Leadership, Committee Chairs and Ranking Members,

We are 26 computer scientists, software engineers, and technologists who have spent decades working in
these fields producing innovative and effective products for a variety of applications in database
technology, cryptography, open-source software, and financial technology applications.

Today, we write to you urging the Committee to take a critical, skeptical approach toward industry claims
that crypto-assets (sometimes called cryptocurrencies, crypto tokens, or web3) are an innovative
technology that is unreservedly good. We urge you to resist pressure from digital asset industry financiers,
lobbyists, and boosters to create a regulatory safe haven for these risky, flawed, and unproven digital
financial instruments and to instead take an approach that protects the public interest and ensures
technology is deployed in genuine service to the needs of ordinary citizens.

We strongly disagree with the narrative—peddled by those with a financial stake in the crypto-asset
industry—that these technologies represent a positive financial innovation and are in any way suited to
solving the financial problems facing ordinary Americans.

Not all innovation is unqualifiedly good; not everything that we can build should be built. The history of
technology is full of dead ends, false starts, and wrong turns. Append-only digital ledgers are not a new
innovation. They have been known and used since 1980 for rather limited functions.

As software engineers and technologists with deep expertise in our fields, we dispute the claims made in
recent years about the novelty and potential of blockchain technology. Blockchain technology cannot, and
will not, have transaction reversal mechanisms because they are antithetical to its base design. Similarly,
most public blockchain-based financial products are a disaster for financial privacy; the exceptions are a
handful of emerging privacy-focused blockchain finance alternatives, and these are a gift to
money-launderers. Financial technologies that serve the public must always have mechanisms for fraud
mitigation and allow a human-in-the-loop to reverse transactions; blockchain permits neither.

By its very design, blockchain technology, specifically so-called “public blockchains”, are poorly suited
for just about every purpose currently touted as a present or potential source of public benefit. From its
inception, this technology has been a solution in search of a problem and has now latched onto concepts
such as financial inclusion and data transparency to justify its existence, despite far better solutions
already in use. After more than thirteen years of development, it has severe limitations and design flaws
that preclude almost all applications that deal with public customer data and regulated financial
transactions and are not an improvement on existing non-blockchain solutions.

Finally, blockchain technologies facilitate few, if any, real-economy uses. On the other hand, the
underlying crypto-assets have been the vehicle for unsound and highly volatile speculative investment
schemes that are being actively promoted to retail investors who may be unable to understand their nature
and risk. Other significant externalities include threats to national security through money laundering and
ransomware attacks, financial stability risks from high price volatility, speculation and susceptibility to
run risk, massive climate emissions from the proof-of-work technology utilized by some of the most
widely traded crypto-assets, and investor risk from large scale scams and other criminal financial activity.

We ask you to take a truly responsible approach to technological innovation and ensure that individuals in
the US and elsewhere are not left vulnerable to predatory finance, fraud, and systemic economic risks in
the name of technological potential which does not exist.

The risks and externalities related to blockchain technologies and crypto-asset investments are neither
isolated nor are they the growing pains of a nascent technology. They are the inevitable outcomes of a
technology that is not built for purpose and will remain forever unsuitable as a foundation for large-scale
economic activity.

Given these risks and externalities, together with the—at best still-ambiguous and at worst
non-existent—uses of blockchain, we recommend that the Committee look beyond the hype and bluster of
the crypto industry and understand not only its inherent flaws and extraordinary defects but also the litany
of technological fallacies it is built upon.

We need to act now to protect investors and the global financial marketplace from the severe risks posed
by crypto-assets and must not be distracted by technical obfuscations which mask an abject lack of
technological utility. We thank you for your leadership on financial technology and regulation and urge
you to consider our objective and independent expert judgments to guide your legislative priorities, which
we remain happy to discuss anytime.