How did the debate between Warren and Deaton reveal deeper tensions within US financial regulation, and could their opposing views on crypto play a role in shaping the Senate’s future?
classic confrontation
The first encounter between Democratic Senator Elizabeth Warren and her Republican opponent, attorney John Deaton, on the night of October 15, was not polite.
The hour-long debate, co-sponsored by WBZ-TV and The Boston Globe, was a rollercoaster of policy clashes and personal digs, and at one point the cryptocurrency issue took center stage.
Senator Warren, known for her staunch stance on regulating the crypto industry, wasted no time in accusing Deaton of being too cozy with crypto players.
On the other hand, Deaton, a prominent lawyer with a history of defending crypto investors, has portrayed himself as a champion of financial innovation.
A long-time advocate for consumer protection, Warren has frequently criticized the crypto world, labeling it a ‘haven for scams and scams’. His push for tougher regulations has won him both supporters and critics.
Deaton, on the other hand, has gained a reputation for defending the rights of individual investors and smaller players in the crypto space, especially in lawsuits against the SEC. His stance reflects a more pro-crypto, less regulatory-heavy approach.
Let’s uncover the key moments from this heated debate and what it tells us about the future of crypto regulation in the US Senate race.
Crypto clash in Senate debate
The first Senate debate between Elizabeth Warren and John Deaton was supposed to be about more than one issue. But in the real political drama, the highlight was crypto.
Warren, known for her strong advocacy for tighter crypto regulations, wasted no time in accusing Deaton of being overly aligned with the crypto industry.
He cited campaign finance figures and noted: “90% of his profits [Deaton’s] Campaign funding comes from the crypto industry.” “If John Deaton goes to Washington, his crypto friends will expect a return on their investment,” he added, framing him as a candidate more interested in defending crypto interests than meeting the needs of ordinary citizens.
Deaton responded by questioning the Senator’s focus on crypto:
“I wish Senator Warren would attack inflation like she attacked crypto. “I wish it would attack securing the border the way it focuses on crypto.”
Deaton also defended his pro-crypto stance by sharing a personal story about his mother who was affected by high banking fees.
“When Bitcoin (BTC) came out, I thought of my mother who couldn’t use a bank account because of the fees. “Bitcoin offered a way to cut out predatory banks and middlemen,” he explained, positioning himself as a candidate who sees crypto as part of the financial inclusion solution, especially for marginalized communities.
In response, Warren doubled down on her familiar rhetoric that cryptocurrency facilitates illegal activities such as money laundering and terrorist financing. He argued that crypto should be subject to the same regulations as other financial institutions.
“I want cryptocurrency to follow the same rules as every bank, broker, and credit union,” Warren said, framing her stance as a matter of financial security and regulatory fairness.
The discussion also touched on Bitcoin’s self-custody, with Deaton accusing Warren of favoring large financial institutions over individual investors. He criticized her for supporting a bill that, in her opinion, would restrict self-custody of Bitcoin for individuals and allow banks to store Bitcoin.
“The bill prohibits self-custody of Bitcoin in America, but allows banks to store Bitcoin,” he said, highlighting what he sees as a contradiction in Warren’s policies.
Deaton also cited Ripple (XRP) v. He also brought up his involvement in the SEC case, advocating for XRP holders against “regulatory overreach.”
He used this as evidence of his willingness to take on big institutions and stand up for small investors, touting that his efforts recently led to a $1 million donation to Ripple co-founder Chris Larsen’s super PAC supporting Vice President Kamala Harris.
Deaton argued that Warren frequently clashes with crypto insiders, even though she claims she owes them money.
“If I had not done what I did (filed the SEC on behalf of small individual investors), this donation to your candidate, the Senator, would not have happened. So, Mr. Vice President, if you’re watching, you’re welcome.”
Warren and Deaton’s crypto backgrounds
The crypto conflict between Senator Warren and her opponent Deaton in the Massachusetts Senate debate did not come out of nowhere. Both candidates have a deep history tied to digital assets; but these are in very different ways.
Warren: Crypto critic
Warren has been a vocal critic of the crypto industry for years. Now running for his fourth term as a U.S. Senator, he sits on both the Senate Finance Committee and the Banking, Housing and Urban Affairs Committee (two key bodies that oversee financial regulation, including cryptocurrency).
At a Senate Armed Services Committee hearing in May 2024, Warren noted how cryptocurrencies could undermine US national security.
He cited intelligence reports indicating that Iran and North Korea are using cryptocurrencies to evade sanctions; More than 50% of North Korea’s foreign exchange earnings reportedly now come from crypto.
Warren also grilled high-ranking military officials, pushing for stricter anti-money laundering regulations to prevent adversaries from exploiting the growing crypto ecosystem.
His firm belief is that without proper oversight, cryptocurrencies offer a gateway for bad actors to finance illegal activities such as terrorism, drug trafficking, and sanctions evasion.
But Warren’s opposition to crypto isn’t just about national security. He has consistently argued that the industry exposes consumers to fraud, volatility, and environmental damage, especially from energy-intensive Bitcoin mining.
His push for tighter regulations is based on ensuring that the crypto world follows the same rules as traditional financial institutions and offers the same protections for average citizens.
Deaton: Crypto advocate
Deaton, a long-time crypto advocate, was involved in the high-profile Ripple v. He is known for his work defending XRP holders in the SEC case. In 2021, Deaton filed a petition challenging the SEC’s assertion that Ripple’s native cryptocurrency, XRP, is a security.
His petition argued that the SEC’s approach violated case law, and his advocacy led to his appointment as amicus brief in the case representing more than 75,000 XRP holders.
In addition to his legal work, Deaton also runs CryptoLaw, a platform that provides updates on legal and regulatory developments in the crypto industry.
In February 2024, Deaton officially launched his bid for the U.S. Senate seat in Massachusetts to face Warren. He secured the Republican nomination and made crypto regulation a central issue in his campaign.
In September 2024, shortly after securing the Republican nomination for the Senate, Deaton tweeted that the SEC’s actions in the Ripple and SEC case caused small investors to lose more than $15 billion due to “gross overreach.”
He is particularly critical of the SEC’s enforcement-heavy approach, which he argues stifles innovation and penalizes ordinary investors rather than protecting them.
His frustration with Warren stems from Warren’s role on the Senate Banking Committee, which oversees the SEC. Deaton repeatedly admonished Warren for not holding the SEC accountable:
“Since Warren won’t do it, I will do it when I get to the Senate.”
His decision to run for the Senate was motivated in part by a desire to challenge the status quo of financial regulation and hold regulators such as the SEC accountable for their actions. Deaton made clear that, in his opinion, current lawmakers, including Warren, have failed to protect the people they claim to represent.
What to expect next?
The 2024 US elections are shaping up to be drastically different from the 2020 elections, especially when it comes to the role of crypto.
Crypto was barely mentioned in the presidential debates in 2020, and digital assets were still overshadowed by the broader political arena.
Fast forward to 2024 and crypto has become a hot topic thanks to widespread adoption and relentless advocacy of the space.
As Warren and Deaton prepare for their second debate on October 17, the odds remain in Warren’s favor, with polling data showing her with a 22.5% lead.
But Deaton’s pro-crypto stance may still resonate with voters looking for change, especially those who see crypto as an engine of innovation and financial empowerment.
Meanwhile, on the national stage, the US presidential race is heating up. Donald Trump currently has a 60% lead to Vice President Kamala Harris’ 40%, according to Polymarket.
The fact that cryptocurrency has become a major topic of discussion in both the Senate and presidential races reflects the growing influence of the industry and represents a turning point for both the industry and the American financial system as a whole.