New consumer advocacy group launches to highlight crypto risks

A new cryptocurrency-focused consumer advocacy group launched Tuesday, aiming to highlight the risks associated with the industry and educate Americans about them.

The non-profit known as Crypto Watchdog is hoping to “bring sunlight to what has so far been a not very transparent industry,” Chapin Fay, executive director of Crypto Watchdog, told The Hill.

“We’re going to focus on areas of the crypto story that advocates often minimize and are sort of underdeveloped at this point — consumer fraud, market manipulation, insider advantage, criminal misuse, national security risks,” he said.

The group aims to highlight the potential for scams and high volatility, how the industry can benefit insiders and the role of digital assets in money laundering and sanctions evasion, according to its website.

“We are not anti-crypto. We are pro-innovation,” Fay added. “But part of innovation is accountability. And we’re here to make sure that everyone, particularly the average American, understands the risks involved in these different assets.”

On an advisory board serving the group is Mitch Silber, former director of intelligence analysis at the New York City Police Department, and Jack St. Martin, chief of staff for the Nevada Republican Assembly Caucus.

Its launch, which was first shared with The Hill, comes at a moment when Congress is weighing major crypto legislation.

The Clarity Act, which would create a regulatory framework for the industry, is at a key inflection point in the Senate after months of negotiations. It has advanced out of the Senate Banking and Agriculture Committees, but several sticking points remain as the bill awaits a floor vote.

“This is an important moment in the crypto lifespan here,” Fay said. “We’re in this middle gray ground here, where there’s starting to be some regulation. There’s starting to be debate at all levels about how to create a regulatory scheme that protects the industry as well as retail investors.”

“We felt now is the right time to start shining a light on all of this, so that the decisionmakers who are going to create a regulatory scheme have all the information they need and are not just hearing from one side of a very well-funded industry,” he added.

Congress passed the GENIUS Act last July, which created a framework for one form of crypto known as stablecoins. The Clarity Act would apply to a much broader swath of digital assets, which has also made it a more complicated endeavor.

Key disputes over ethics and software developer protections continue to plague Senate Republicans and crypto-friendly Democrats, who have been negotiating on the bill for nearly a year. But as the midterm elections draw closer and other legislative issues take priority, they are facing an increasingly narrow window.

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