How did the debate between Warren and Deaton expose deeper tensions within U.S. financial regulation, and could their opposing views on crypto play a role in shaping the Senate’s future?

The classic face-off

The first face-off between Democratic Senator Elizabeth Warren and her Republican challenger, attorney John Deaton, on Oct. 15 night was anything but polite. 

Co-sponsored by WBZ-TV and The Boston Globe, the hour-long debate was a rollercoaster of policy clashes and personal digs, with the topic of cryptocurrency taking center stage at one point.

Senator Warren, known for her firm 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, painted himself as a champion for financial innovation. 

Warren, a long-time advocate for consumer protection, has often criticized the crypto world, labeling it as a ‘haven for fraud and scams.’ Her push for tougher regulations has earned her both supporters and critics. 

Deaton, on the other hand, has built a reputation for defending the rights of individual investors and smaller players in the crypto space, notably in cases against the SEC. His stance reflects a more pro-crypto, less regulatory-heavy approach.

Let’s uncover the key moments from this fiery discussion and what it tells us about the future of crypto regulation in the U.S. Senate race.

Crypto clash in Senate debate

The first Senate debate between Elizabeth Warren and John Deaton was supposed to be about multiple issues. But in true political drama, the topic that stole the show was crypto.

Warren, known for her strong advocacy of tighter crypto regulation, wasted no time accusing Deaton of being overly aligned with the crypto industry.

She cited campaign finance numbers, stating, “90% of his [Deaton’s] campaign funding comes from the crypto industry.” She added, “If John Deaton goes to Washington, his crypto buddies will expect a return on their investment,” framing him as a candidate more interested in defending crypto interests than addressing the needs of regular citizens.

Deaton responded by questioning the Senator’s focus on crypto:

“I wish Senator Warren would attack inflation the way she attacks crypto. I wish she would attack securing the border the way she’s focused on crypto.”

Deaton also defended his pro-crypto stance by sharing a personal story about his mother, who had been impacted by high banking fees.

“When Bitcoin (BTC) came along, I thought of my mom, who couldn’t maintain a bank account due to fees. Bitcoin offered a way to cut out the predatory banks and middlemen,” he explained, positioning himself as a candidate who sees crypto as part of the solution for financial access, particularly for marginalized communities.

Warren, in response, doubled down on her familiar narrative that crypto facilitates illegal activities, such as money laundering and terrorism financing. She argued that crypto should be subject to the same regulations as other financial institutions.

“I just want crypto to follow the same rules as every bank, stockbroker, and credit union,” Warren asserted, framing her stance as a matter of financial safety and regulatory fairness.

The debate also touched on Bitcoin self-custody, with Deaton accusing Warren of favoring large financial institutions over individual investors. He criticized her for supporting a bill that, according to him, restricts Bitcoin self-custody for individuals while allowing banks to custody Bitcoin.

“Her bill bans Bitcoin self-custody in America, but she’s allowing banks to custody Bitcoin,” he said, highlighting what he sees as a contradiction in Warren’s policies.

Deaton also brought up his involvement in the Ripple (XRP) v. SEC lawsuit, where he advocated for XRP holders against what he called “regulatory overreach.”

He used this as evidence of his willingness to take on big institutions and stand up for small investors, suggesting that his efforts led to a recent $1 million donation from Ripple co-founder Chris Larsen to a super PAC supporting Vice President Kamala Harris.

Deaton argued that he has often clashed with crypto insiders, despite Warren’s claims that he is beholden to them.

“If I didn’t do what I did — sue the SEC on behalf of small retail investors—that donation to your candidate of choice, Senator, would not have happened. So, Madam Vice President, if you’re watching, you’re welcome.”

Crypto histories of Warren and Deaton

The crypto clash between Senator Warren and challenger Deaton in the Massachusetts Senate debate didn’t emerge out of thin air. Both candidates have deep histories tied to digital assets—though in vastly different ways.

Warren: The crypto critic

Warren has been a vocal critic of the crypto industry for years. Now seeking her fourth term as a U.S. Senator, she sits on both the Senate Finance Committee and the Committee on Banking, Housing, and Urban Affairs—two key bodies that oversee financial regulation, including crypto.

In May 2024, during a Senate Armed Services Committee hearing, Warren brought attention to how cryptocurrencies could undermine U.S. national security.

She cited intelligence reports indicating that Iran and North Korea have been using crypto to evade sanctions, with more than 50% of North Korea’s foreign currency revenues now reportedly coming 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.

Her firm belief is that, without proper oversight, cryptocurrencies offer a gateway for bad actors to fund illicit activities such as terrorism, drug trafficking, and sanctions evasion.

But Warren’s opposition to crypto isn’t just about national security. She’s consistently argued that the industry exposes consumers to fraud, volatility, and environmental harm — particularly from energy-intensive Bitcoin mining.

Her push for tighter regulations is rooted in ensuring that the crypto world follows the same rules as traditional financial institutions, offering the same protections for average citizens.

Deaton: The crypto advocate

Deaton, a long-time crypto advocate, is best known for his work defending XRP holders in the high-profile Ripple v. SEC case. In 2021, Deaton filed a petition challenging the SEC’s claim that XRP, the native cryptocurrency of Ripple, was a security.

His petition argued that the SEC’s approach violated legal precedent, and his advocacy led to his appointment as amicus counsel in the case, representing over 75,000 XRP holders.

In addition to his legal work, Deaton 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 in Massachusetts to face off against Warren. He secured the Republican nomination and has 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 vs. SEC case had caused small investors to lose over $15 billion due to its “gross overreach.”

He’s particularly critical of the enforcement-heavy approach taken by the SEC, which he argues has stifled innovation and punished ordinary investors rather than protecting them.

His frustration with Warren stems from her role on the Senate Banking Committee, which oversees the SEC. Deaton has repeatedly called out Warren for failing to hold the SEC accountable, stating:

“Since Warren won’t do it, when I get to the Senate, I will.”

His decision to run for the Senate was, in part, motivated by his desire to challenge the status quo of financial regulation and to hold regulators like the SEC accountable for their actions. Deaton has made it clear that, in his view, current lawmakers, including Warren, have failed to protect the very people they claim to represent.

What to expect next?

The 2024 U.S. elections are shaping up to be drastically different from those of 2020, particularly when it comes to the role of crypto. 

Back in 2020, crypto was barely mentioned in the presidential debates, with digital assets still in the shadows of the broader political arena. 

Fast forward to 2024, and crypto has become a key issue, driven by widespread adoption and relentless advocacy from within the space.

As Warren and Deaton gear up for their second debate on Oct. 17, the odds remain in Warren’s favor, with polling data showing her leading by 22.5%. 

However, Deaton’s pro-crypto stance could still resonate with voters looking for change, particularly those who see crypto as an engine for innovation and financial empowerment. 

Meanwhile, on the national stage, the U.S. presidential race is also heating up. According to Polymarket, Donald Trump currently leads with 60% odds against Vice President Kamala Harris’s 40%. 

The fact that crypto has become a major talking point in both Senate and presidential races reflects the industry’s growing influence, marking a turning point for both the sector and the American financial system as a whole.