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Conspiracy theorists aren’t surprised. They have known all along that central banks and governments would never allow fiat money to exist as a competitor. Even some regulators knew. For example, Brian Brooks, former director of the Office of the Comptroller of the Currency, an independent branch of the U.S. Treasury, said something similar.
Regulators have unraveled the entire US-based cryptocurrency industry. The Securities and Exchange Commission (SEC) has taken action against regulated U.S. cryptocurrency companies, including Kraken and Coinbase, while the Commodity Futures Trading Commission (CFTC) has sued Binance.
When the SEC acquired Kraken for the second time, founder and former CEO Jesse Powell tweeted: heartbreak meaning.
Additionally, in February, Wells sent a notice to Paxos demanding that the New York-based company stop issuing the Binance USD (BUSD) stablecoin.
Next, there is the ‘President’s Economic Report’, in which the Biden administration claims that cryptocurrency is not a useful technology and highlights rampant fraud in the industry.
Additionally, the bank closures of three cryptocurrency-friendly banks (Silvergate, Silicon Valley Bank, and Signature Bank) have raised questions across the skeptical cryptocurrency industry, with politicians such as Senator Elizabeth Warren calling for a crackdown on cryptocurrencies. Warren has even introduced legislation to ban self-management of cryptocurrencies.
Some players in the cryptocurrency industry have pointed to these three bank failures as evidence of a conspiracy by federal agencies to destroy cryptocurrencies. called This is the new Operation Choke Point. In fact, even former Congressman Barney Frank suggested that Signature, the bank on which he sits on the board, was shut down as part of the anti-cryptocurrency movement. Frank served as a director of Signature Bank. He believes the bank was forced into liquidation by the New York Department of Financial Services (NYDFS) because “regulators wanted to send a very strong anti-cryptocurrency message.”
NYDFS denies Frank’s claims. Reuters reports that the Federal Deposit Insurance Corporation (FDIC) will require Signature Bank’s buyers to limit banking services to cryptocurrency customers. Despite the FDIC denying that the buyer would abandon cryptocurrency customers, those customers were not included in the acquisition.
Notably, the current head of the FDIC is Martin Gruenberg, the architect of Operation Choke Point, the first operation to face lawsuits and hearings alleging the U.S. government abused its power. The FDIC has made promises of reform, but these now seem empty.
When regulators shut down Signature Bank, managers were surprised by their decision to place the bank in receivership. Barney Frank, executive director of Signature Bank, known for the banking regulations widely known as the Dodd-Frank Act enacted in the wake of the 2008 financial crisis, said:
“I think if we could have opened tomorrow we would have been able to continue. We have a strong loan book and are the largest lender in New York City under the Low-Income Housing Tax Credit. “I think banks could have continued to be a concern.”
Frank also said, “This is just a way of saying to people, ‘We don’t want you dealing with cryptocurrencies.’” Frank, who chaired the House Financial Services Committee after the global financial crisis, said there was “no real objective reason” to seize Signature at the time. He blames the closure of banks on panic over cryptocurrencies. He said, “We became the poster boys because no one was faithful to the basics.” Frank added:
“The FDIC and the State of New York looked at the situation and made a decision. To be honest, I was surprised. They clearly had a more negative view of our ability to pay..”
Frank believes that if FTX had not collapsed last year, neither SVB nor his bank would have collapsed. It sparked a panic that has yet to subside. The justification for Signature’s closure was that Signet products were deemed “systemic.” But Signature’s asset portfolio wasn’t as bad as SVB’s. Nonetheless, starting this year, the top three banking partners for cryptocurrencies are now history.
2023 wasn’t a bad year at all for the U.S. cryptocurrency industry. The U.S. Department of Justice has taken some offense to agencies like the SEC, even accusing them of engaging in fraudulent practices. Nonetheless, damage appears to have been done in many ways.
It now seems clear that the US government poses an existential threat to the US cryptocurrency industry. It was released to the industry in 2023 and 2024 could be more similar. In fact, startups and established companies believe that the lawn looks greener in jurisdictions where the right to innovation is respected. This is a huge shame for the so-called “land of the free” and the cryptocurrency industry as a whole.