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Is the Federal Government Trying to Kill Off Crypto?

The federal government’s recent actions against crypto are – rightly or wrongly – widely perceived as a coordinated attempt to maim digital assets.

The current administration’s animus against cryptocurrency is clear in official statements, and then there’s all the actions.

After ignoring industry pleas for guidance and regulation for years, the U.S. government seems to be going after all parts of crypto with a vengeance.

The assault has included a series of enforcement actions by the Securities and Exchange Commission (SEC) against regulated U.S. crypto entities including Kraken and Coinbase,

while the Commodity Futures Trading Commission (CFTC) sued Binance.

The Biden administration also released its “Economic Report of the President,” which made the case that cryptocurrency is not a useful technology while focusing on a series of crypto-inspired criminal frauds that unfolded in recent years.

The Reason’s for disbelieving that there is coordinated ill-intent are twofold

one rooted in idealism and the other cynicism.

  • First, this is the U.S., the land of opportunity and freedom. A deliberate attack against the economic freedom that crypto represents would run against this country’s values.
  • Second, this is the U.S., the land of crumbling infrastructure. Our leadership can’t even muster the coordination necessary to repair the country’s bridges and railways.

It is too depressing to imagine they might be more aligned on destroying the financial infrastructure of the future than maintaining the physical infrastructure of the present.

Supporting the lack-of-coordination side of the argument is how the CFTC, in its suit against Binance,

claims the cryptocurrency ether is a commodity while the SEC and the New York Attorney General both argue it’s a security.

Without a significant change of course by the Biden administration, the view that the U.S. is anti-crypto will soon become too entrenched to uproot.

The fact that most of the U.S. government’s actions have been punitive rather than constructive is a huge factor.

The crypto market will survive with or without America

The crypto market will survive with or without America

Bitcoin and many other cryptocurrencies would survive even a sweeping, indiscriminate regulatory crackdown functionally unscathed.

That’s their entire point: These systems were conceived with the goal of empowering individuals to control their own fates in the digital era, separately from government and corporate structures.

Cryptocurrency does have real-world uses and benefits, including serving as a financial alternative for those facing repression and violence around the world.

In just one example, cryptocurrency allowed $100 million in aid to quickly reach Ukraine in the wake of Russia’s invasion – faster than aid was able to move through more formal government channels.

More broadly, crypto has become a nexus of advocacy for tools that resist the dangerous concentration of digital power in the hands of companies whose hoards of data make surveillance and censorship their primary stock in trade.

The worrying rise of surveillance capitalism is a topic of clear concern for many of the legislators whose authority bank regulators currently appear to be usurping.

While speculation drives much of the market activity in digital assets (much like the market for technology stocks), their prices are also driven by real demand from current users.

Billions of dollars in value move around the world over the Bitcoin network every day.

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