The price of Bitcoin has experienced an upward trend during the initial months of 2023. However, it is still significantly lower than its peak in late 2021. Crypto traders are acknowledging the emergence of a “new market regime”, as the future proposes a U.S Crypto Crackdown.
At the same time, the future of Ethereum and other Cryptocurrencies is uncertain. This is due to an ongoing power struggle among U.S. regulatory agencies vying for control over the Crypto market.
The leaked memo instructs Democrat lawmakers on key messages to follow
A leaked memo, circulated by the Democrat House financial services committee members reveals the “key messages” that lawmakers were instructed to stick to. This could result in almost all Cryptocurrencies being categorised as securities.
Further, The Democratic Party passed the document to committee members ahead of Wednesday’s joint House hearing on Crypto policy. Fox Business reporter Eleanor Terrett leaked it on Twitter.
According to the memo, the main issue lies not in ambiguity but in widespread non-compliance with current laws. It is not feasible to create new regulatory frameworks simply because Crypto companies refuse to adhere to existing regulations.
Furthermore, the memo urges Democrat lawmakers to counter Republican assertions. The Republicans assert that they are working towards bringing clarity to the markets by creating a dedicated area for the Commodity Futures Trading Commission (CFTC).
Additionally, the memo states that Republicans are demonstrating a lack of commitment to safeguarding the interests of investors and consumers. It also states that their actions do not align with their claimed intentions, leading to a U.S Crypto Crackdown.
High-profile Republicans, such as Ted Cruz, have given their backing to Crypto. Meanwhile, the influential former Democrat presidential hopeful Elizabeth Warren has embraced the idea of “building an anti-crypto army.”
Joint effort to combat Cryptocurrency as legal tender gains momentum
On May 14th, lawmakers reintroduced a bipartisan bill from 2022 to Congress. The proposed measure necessitates U.S. federal agencies to provide reports concerning El Salvador’s capabilities in terms of cybersecurity and financial stability. The move is a joint effort to fight the use of Cryptocurrency as legal tender.
Further, they claim that Bitcoin could “weaken economic and financial stability and empower malign actors.”
In 2021, El Salvador achieved a significant milestone by becoming the first country globally to adopt Bitcoin as a legal tender. President Nayib Bukele played a crucial role in this decision and personally acquired 2,400 bitcoins. This move was part of a larger strategy to integrate Bitcoin as a fundamental component of the country’s economy. Moreover, Jim Risch, a Republican from Idaho announced the legislation.
He told the Washington Examiner, “Given U.S. interest in prosperity and transparency in Central America, we must seek greater clarity on how the adoption of bitcoin as legal tender may impact El Salvador’s financial and economic stability.”
Bukele posted to Twitter last year when the bill was first introduced, “Never in my wildest dreams would I have thought that the U.S. government would be afraid of what we are doing here.”
The SEC’s authority to classify Crypto assets as securities combats U.S Crypto Crackdown
Following the bitcoin, Ethereum, and cryptocurrency boom, U.S. President Joe Biden issued an executive order last year. It instructed federal agencies to explore ways to address this phenomenon.
Under the leadership of Gary Gensler, the U.S. Securities and Exchange Commission (SEC) has asserted its jurisdiction over the crypto market. It considers all cryptocurrencies, except bitcoin, to be unregistered securities.
The memo emphasises that both the SEC and the Commodity Futures Trading Commission (CFTC) agree. The SEC holds the authority to determine whether crypto assets qualify as securities. The SEC has expressed a clear stance that the majority of crypto assets fall under the category of securities, concluding the matter.
Gensler has faced criticism from the crypto community for his approach to enforcing regulations. He has consistently appealed to Congress for additional resources to effectively oversee the crypto market.
According to the memo, Republicans are seeking to reverse the current course and limit the powers of the SEC. The memo emphasises the importance of the SEC maintaining its role as the primary regulator of the U.S. crypto market. It also urges the Congress to fulfil its responsibilities by providing the necessary support.
The memo has faced broad criticism from the Bitcoin, Ethereum, and crypto industries.
Lastly, Ari Paul, the chief investment officer of BlockTower Capital, expressed his astonishment on Twitter.
He posted,
“It’s bizarre that they have put something so blatantly illegal in writing. The SEC does not possess the authority to determine what qualifies as a security under the law. Their attempt to do so would constitute a violation of the laws that govern their operation.”
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