Industry Thinks Feds Are Trying to Kill Crypto, White House Denies It

Industry Thinks Feds Are Trying to Kill Crypto, White House Denies It

Time Stamp: May 3, 2023 11:26 AM
Source Node: 2627987

Intelligencer | Jen Wieczner | May 1 2023

Unsplash Ricardo Arce Target - Industry Thinks Feds Are Trying to Kill Crypto, White House Denies It

Image: Unsplash/Ricardo Arce

Are the Feds Trying to Kill Crypto?

  • Protego Trust, founded by a lawyer turned venture capitalist, was betting big that it could be the squeaky-clean, bona fide bank that crypto needed to win Wall Street’s business. It had spent $80 million pursuing a coveted approval for a national trust charter, winning conditional approval in 2021. It then raised more than $100 million — at a reported $2 billion valuation — from big crypto companies, including Coinbase.
    • “We courted regulation. We did everything that was required in order to build a pristine financial institution to serve the most discerning institutional clients,” says Protego founder Greg Gilman.  But when Protego told the OCC in February that it had completed all of the agency’s requirements for full approval, its application was denied on a technicality — one that the OCC had never mentioned before, according to a person familiar with the situation.
    • It has led to an almost universal conviction that financial regulators are purposefully trying to put them out of business — not by barring them explicitly but rather through the recent appearance of a web of policies, both written and unwritten, that together make it unfeasible or impossible for crypto firms to operate in the U.S.
  • Critics tend to see as neither legitimate nor productive — are now calling what’s happening to crypto “Operation Choke Point 2.0.”  Indeed, the Gensler-led crackdown over the past six months has, according to many in the sector, pushed things to a crisis point, forcing a desperate decision: Fight against the federal government or flee the country.

See:  16z: 2023 State of Crypto (and Index)

Sheila Warren, CEO of the Crypto Council for Innovation:

I think all the conspiracy theorists are definitely onto something.  There is enough circumstantial evidence to say, ‘Oh yeah, that’s a real thing.

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Decrypt | André Beganski | Mar 2, 2023

The Democratic presidential candidate endorsed the view that recent turmoil in the U.S. banking sector was fallout from a "war on crypto."

  • Democratic presidential candidate Robert F. Kennedy Jr. has criticized the perceived "war on crypto" waged by the FDIC and SEC, claiming they lack authority to do so. Kennedy opposes a U.S. central bank digital currency and argues that this war on crypto negatively impacts major banks.
    • Referencing an article written by Ellen Brown titled “How the War on Crypto Triggered a Banking Crisis,” Kennedy said Brown makes a “strong case” that a government-led campaign against the digital assets industry led to several historic bank failures in March, specifically Silicon Valley Bank, Signature Bank, and Silvergate Bank.
    • Whether or not there’s a concerted effort to uproot crypto from the U.S. financial system is a contentious topic.

FFCON23 Video:  Strategies for Canadian Fintech Companies Amidst Regulatory Crackdowns

  • The Federal Reserve issued clarity days after Kennedy’s anti-CBDC remarks, saying the launch of its FedNow payments system is neither a digital currency nor a replacement for cash, which Kennedy appeared to conflate with a CBDC.
  • While certain Democrats like Elizabeth Warren have slammed crypto numerous times and made criticism of the industry a key pillar of their political platform

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NCFA Jan 2018 resize - Industry Thinks Feds Are Trying to Kill Crypto, White House Denies ItThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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