"Bad actors — from North Korea to Russia to terrorist groups like Hamas — aren't turning to crypto because they've seen the ads and bought the hype," Brown said. "They're using it because they know it's a workaround. They know that it's easier to move money in the shadows without safeguards, like know-your-customer rules or suspicious transaction reporting.... We must make sure that crypto platforms play by the same rules as other financial institutions."

Brown's words were amplified by Deputy Treasury Secretary Wally Adeyemo, who urged Congress to enact reforms the Treasury has proposed that would strengthen sanctions on "foreign digital asset providers that facilitate illicit finance."

On Monday, meanwhile, Sen. Elizabeth Warren, D-Massachusetts — perhaps the most uncompromising foe of crypto on Capitol Hill — took aim at stablecoins by urging the House Financial Services Committee to avoid trying to write rules that would "fold stablecoins deeper into the banking sector."

Given the potential of stablecoins and their ilk to "undermine consumer protection and the safety and soundness of the banking system," she warned, any so-called reforms "could amplify and entrench these risks rather than mitigate them."

What is driving the interest of politicians in promoting an asset class that hasn't shown any value except where fraud or theft is involved? As is so often the case, it's money — the green, foldable kind.

Crypto promoters have been stepping up their lobbying in Washington; crypto firms spent nearly $20 million on lobbying in the first nine months of 2023, according to the watchdog group Open Secrets.

As a push for a new regulatory approach, especially among House Republicans, dovetails with an election year, much more spending would appear to be in the offing. It's a win-win-lose situation, with politicians and crypto promoters poised to win, and ordinary investors as well as the economy as a whole poised to lose.

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