The recent actions of the United States Securities and Exchange Commission (SEC) towards the cryptocurrency market appear to be in line with the previously expressed expectations of venture capitalist and CoinMetrics co-founder Nic Carter.
Coordinated attack on crypto?
Indeed, ahead of the news of regulatory pressure on crypto trading platform Kraken, Carter warned that there are coordinated efforts against the crypto industry in the US and that these activities are intensifying in the new year, as he announced on Feb.
I don’t want to alarm, but since the turn of the year, a new Operation Choke Point type operation began targeting the crypto space in the US. it is a well-coordinated effort to marginalize the industry and cut of its connectivity to the banking system – and it’s working
— nic carter 🌠 (@nic__carter) February 7, 2023
The venture capitalist detailed his views in a summary he released Feb. 9, claiming that “the U.S. government is using the banking sector to orchestrate sophisticated, widespread repression against the crypto industry,” calling it “Operation Choke Point 2.0” and not hiding these efforts.
“However, the breadth of this scheme – encompassing virtually every financial regulator – and its highly coordinated nature has even the most keen-eyed crypto veterans worried that crypto businesses may be completely out of banking, while stablecoins may be stranded and unmanageable. Cryptocurrency inflows and exchanges can be completely shut down from the banking system.”
Carter then said, “The administration itself, the influential members of Congress, the Fed, [Federal Mevduat Sigorta Kurumu (FDIC)], [Para Birimi Denetleme Ofisi (OCC)]and as part of this coordinated plan [Adalet Bakanlığı (DoJ)]”.
Activity ranges from a December letter from a group of Senators to crypto-friendly bank Silvergate “chastifying FTX and Alameda Research for providing services” to a joint statement by the Fed, FDIC and OCC on risks. To the National Economic Council to “strongly discourage banks from transacting with crypto assets” and more.
It’s also worth noting that in October 2022, the co-founder of CoinMetric heavily criticized the White House Office of Science and Technology Policy report on climate impacts for crypto mining, along with Peter McCormack on the What Bitcoin Does podcast.
The report said it contained “possible ways to combat Bitcoin (BTC) mining and the industry, including possible legislation, possible bans and things like that”, acknowledging and denouncing that it expects “state-level bans in more progressive states”. agency of laziness in their approach:
“I think they were lazy and said, ‘Yeah, we’re going to pick the first few results on Google Scholar and go for it.’ Digiconomist is not a reliable source, not something I would expect to see in a serious academic publication, so I think it’s a shame.”
Results for the crypto market
As a result of these actions, Carter said, among other effects, Signature halved the deposits of crypto customers, Metropolitan Commercial Bank shut down the crypto industry, a fraud investigation against Silvergate, as well as Binance suspending USD bank transfers for retail customers. listed the developments.
Meanwhile, Kraken had to shut down its staking services in the US and pay a $30 million fine as part of a settlement with the SEC that charged its platform for selling unregistered securities, which lost more than $40 billion in global crypto market capitalization.
At the same time, the SEC is engaged in a widely publicized legal battle against blockchain company Ripple, which the regulator accuses of illegally offering the XRP token it considers a security. The outcome of this lawsuit is predicted to have a profound impact on the XRP price and overall market sentiment.