July 22, 2024

Strangle the bastard: how the US cracks down on crypto ahead of the launch of FedNow

Back in 2013, Operation Choke Point began in the United States. The purpose of the operation was to cut off access tobanking services for legal but“unreliable” businesses (gambling, porn, guns, payday loans) in the way that the Obama administration understood the concept of “unreliable”. The program was canceled in 2016.
Strangle the bastard: how the US cracks down on crypto ahead of the launch of FedNow

Lately inthe crypto world is talking about Operation Choke Point 2.0, directed against crypto. The point is to cut or severelylimit access of crypto to the American banking system so that crypto does not go beyond the crypto world. This question is especially relevant in anticipation of the launch of FedNow, the American version of our Faster Payment System (FPS).

The attack appears to be being coordinated by the Fed's vice president of oversight, Michael Barr.His last official appearanceCryptocurrency contains a warning to banks that they “should take a cautious approach towards crypto asset activities and the cryptocurrency sector.” The speech is dated March 9. On March 10, Silicon Valley Bank, which served many crypto projects and stored $3.3 billion in reserves of Circle, which issues USDC, closed.

Despite the fact that the problems of regional banks inThe US is associated with rising interest rates and falling bond prices, not crypto, the pressure on banks will continue. In addition to banks, you can put pressure with the help of the SEC, which has become very active recently.

The SEC sued Justin Sun, allegingits TRX and BTT are unregistered securities. And the crypto exchange Coinbase received a so-called Wells notice, warning the exchange that the SEC may bring charges of violating securities laws.

There is no doubt that the attack from two sides (Fed and SEC) will continue in the coming monthswhile the start of the American election campaign is still far away.

Of course, there is nothing particularly good aboutAmericans systematically cut off the crypt from the dollar system, no. However, crypto has enough safety margin to survive this pressure and become a more independent industry.

In the short term we can expect a flowcrypto projects to friendlier jurisdictions, and subsequently, perhaps, to friendlier fiat currencies. For example, the CEO of Ripple recently said that the industry has “already pulled out” from the US, and the law firm Harvey Law Group noted a growing number of people wanting to relocate due to pressure on crypto.

Among the cryptosbitcoin looks like the biggest beneficiary of the current events: The SEC could, of course, try to sueSatoshi Nakomoto, but nothing but clowning will come of it. The pressure on Bitcoin's fiat links seems more realistic, but there are many currencies and Bitcoin will have time to adapt. Among the stablesTether's (USDT) offshore position gives it an edge over archrival Circle (USDC), which has already experienced an outflow of funds after the story with Silicon Valley Bank.

The original post and other interesting materials can be viewed in the Telegram channel of Bitbanker CEO:

  • The crypt is losing its connection with the USD. Where it leads?

  • New sanctions on SWIFT - what to do?

  • How will the Swiss banking crisis affect crypto?

  • We will be happy to answer your questions in the comments.