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Is Biden in favor of cryptocurrencies? The lawyer dismantles the public position
Scott Johnsson, a financial lawyer at Van Buren Capital, provided an in-depth analysis criticism via His remarks suggest that despite some superficially positive gestures such as the spot approval of the Ethereum ETF, the administration’s fundamental position remains deeply antagonistic towards Bitcoin and cryptocurrencies.
Persistent regulatory actions against cryptocurrencies
Johnsson begins by addressing the Office of the Comptroller of the Currency’s (OCC) refusal to implement the “fair access” banking rule. This rule, championed by former Comptroller Brian Brooks, aimed to ensure that federally chartered banks could not deny financial services based on political or ideological reasons. The administration’s rejection of this rule exemplifies a broader reluctance to dismantle regulatory barriers that discriminate against crypto firms.
This position is further highlighted by numerous aggressive ones executive actions against major exchanges, including Coinbase, Binance, and Kraken. Everyone faces an application based on what Johnsson calls an “unimaginably expansive definition of security.” These actions have taken place without clear guidance from regulators, creating a climate of uncertainty and fear among crypto firms regarding potential lawsuits and the broad enforcement of securities law.
The Securities and Exchange Commission (SEC) has been particularly active, issuing Wells notices to several major industry players. This includes Consensys, Uniswap Labs and Paxos, the latter forced to stop issuing the BUSD stablecoin. Each of these actions illustrates the SEC’s willingness to leverage securities law unusually broadly against crypto entities, potentially stifling innovation.
Additionally, Johnsson highlights the SEC’s expansion of the “dealer rule” to include DeFi platforms, requiring them to register as exchanges and comply with ATS regulation. This move calls into question the decentralized nature of these platforms and questions their ability to operate in the current regulatory framework without substantial changes.
Legislative maneuvers and IRS overreach
A key move by Treasury involved inserting definitions of “broker” into crucial legislation under the cover of night, with subsequent IRS rules expanding these definitions to potentially encompass individuals and entities well beyond traditional brokers . This could have serious implications for DeFi platforms, substantially limiting their operations in the United States.
Johnsson also sheds light on the Department of Justice’s (DOJ) departure from the FinCEN guidelines established in its actions against Tornado Cash AND Samurai wallet, charging money transfer fees that threaten serious legal consequences. These decisions mark a significant shift in how privacy-focused tools are treated under US law, signaling a potentially hostile environment for blockchain privacy innovations.
Banking and institutional barriers
The analysis continues with the Federal Deposit Insurance Corporation (FDIC) verbally calling on banks to keep cryptocurrency deposit thresholds at 15% and requiring banks to seek individual approval for new cryptocurrency business engagements. Likewise, that of the Federal Reserve rejection of the Custody’s request to become a member and its refusal to grant a master account illustrate a concerted effort to limit the banking industry’s engagement with crypto entities.
Additionally, the Federal Reserve, FDIC, and OCC have released joint statements highlighting the perceived risks banks face when interacting with cryptocurrencies, discouraging them from maintaining direct exposures to cryptocurrencies.
Political and legislative resistance
The political landscape is no less challenging, with 103 Democrats and two Republicans supporting Senator Warren’s letter exaggerating the role of cryptocurrencies in terrorist financing, without any subsequent retraction. Additionally, Senator Warren’s support for the Digital Asset Anti-Money Laundering Act (DAAMLA) proposes severe restrictions that could amount to a de facto ban on cryptocurrencies.
Johnsson critically notes ongoing veto threats against legislative efforts such as SAB 121, which the Government Accountability Office (GAO) has flagged for improper enactment, and highlights the bill aimed at cryptocurrency miners with burdensome tax obligations. He also mentions blocking legislation on stablecoins and banning their use Central Bank Digital Currencies (CBDC) as part of the administration’s broader strategy to curb the growth of the cryptocurrency industry.
Johnsson concludes that the Biden administration’s actions collectively represent a formidable set of regulatory, legislative, and enforcement hurdles that significantly hinder the potential of Bitcoin and cryptocurrencies in the United States.
“[W]going back on almost all of these issues/items would ONLY bring us back to a neutral position and close to where the Trump admin left us. At that point, apologists can start talking about how the Trump and Biden admins are both “pro-crypto” or whatever adjective they are using to equivocate. Biden is still threatening developers with prison sentences and is still willing to destroy any bank or company that gets in his way,” concludes Johnsson.
At the time of writing, Bitcoin was trading at $68,246.
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