Regulatory Agencies Under Fire
During the NFT.NYC 2023 conference in New York on April 12, U.S. Congressperson Byron Donalds didn’t hold back in criticizing the nation’s regulatory agencies. He unleashed a firestorm of opinion regarding how bodies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are allegedly orchestrating ‘Operation Choke Point 2.0. ‘
What is Operation Choke Point 2.0?
This controversial initiative is reportedly aimed at discouraging banks from engaging with cryptocurrency businesses, all while masquerading under the banner of safety and stability. It’s the minty-fresh sequel to a previous effort that raised alarms within the crypto community.
A Government Conspiracy or Just Bad Communication?
Diving deeper into the murky waters of governmental practices, Donalds asserted, “What I’ve seen in my short time in Congress is that nothing is a coincidence with the government agency.” His claim highlights a growing sentiment among some lawmakers that the government is collaborating more closely than ever to squeeze the crypto industry out of financial services, leaving many to wonder if there’s a conspiracy afoot or just a dramatic miscommunication.
Worrying Signs for Crypto Businesses
From Donalds’ perspective, the crypto climate is becoming increasingly bleak, especially with the Federal Reserve gearing up for a Central Bank Digital Currency (CBDC). He fears that recent enforcement actions are laying the groundwork for this new digital dollar, which he labels a potential threat to the very essence of cryptocurrency.
Old Frameworks and New Regulations
With a humorous analogy, Donalds likened the current regulatory framework to asking a sixth-grade basketball player to referee an NBA final. He firmly believes that the government lacks an adequate understanding of the crypto world and is relying on outdated regulations that date back a century. “They’re basically using a legacy framework of 100 years to tackle today’s innovative needs!” he exclaimed, a sentiment that resonates with many in the digital asset space.
The Arrogance of Authority
In what might be a spicy remark during the conference, Donalds described SEC Chair Gary Gensler as “a very arrogant individual,” claiming he believes he’s the smartest person in the room. It’s not every day you hear a congressperson get candid about agency heads!
Isolating the Financial System
Moreover, evidence has surfaced that U.S. authorities are reviving old enforcement tactics to impose restrictive policies on cryptocurrency firms, effectively isolating them from traditional banking systems. This alleged strategy could leave crypto businesses completely unbanked, igniting controversies across the industry.
Challenges Faced by Crypto Exchanges
The repercussions of these regulatory squeeze tactics are already visible. For instance, reports indicate that Binance.US is grappling with difficulties in securing a new banking partner, following the collapse of Silvergate and Signature Bank. It appears that the crypto exchange is now relying on intermediary banks to manage its funds, illustrating the real-world impacts of these regulatory pressures.
