BitcoinBTC, ethereum and cryptocurrencies have bounced back from their recent lows but remain under serious pressure.
The bitcoin price topped $24,000 per bitcoin last month, up from around $16,000 at the beginning of the year. The ethereum price has seen similar swings as the U.S. lays out its hotly-anticipated crypto roadmap.
Now, the Biden administration has been accused of trying to “quietly” ban bitcoin, ethereum and other cryptocurrencies in a move that’s been described as “Operation Choke Point 2.0″—referring to a 2013 government initiative that sought to cut off undesirable industries from banking services.
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“Some in the crypto space believe that the recent attempts to ringfence the crypto industry and cut off its connectivity to the banking system are reminiscent of this little-known Obama-era program,” bitcoin and crypto-focused venture capitalist Nic Carter, a partner at Castle Island Ventures, wrote in a Substack post published by fellow investor Mike Solana.
Last month, the Federal Reserve rejected crypto bank Custodia’s application to join its ranks, casting doubt over whether the Office of the Comptroller of the Currency will give final approval to crypto companies Protego and Paxos’ applications for national trust bank charters.
“The U.S. government is using the banking sector to organize a sophisticated, widespread crackdown against the crypto industry,” Carter wrote.
“And the administration’s efforts are no secret: they’re expressed plainly in memos, regulatory guidance, and blog posts. However, the breadth of this plan—spanning virtually every financial regulator—as well as its highly coordinated nature, has even the most steely-eyed crypto veterans nervous that crypto businesses might end up completely unbanked, stablecoins may be stranded and unable to manage flows in and out of crypto, and exchanges might be shut off from the banking system entirely.”
Such a move “would be a huge mistake from a U.S. perspective, as it would result in the rest of the world getting ahead in the important crypto and blockchain technology revolution,” Marcus Sotiriou, market analyst at digital asset broker GlobalBlock, wrote in emailed comments.
The Biden administration has said Congress needs to “step up its efforts” to regulate the bitcoin and crypto market, warning it would be a “grave mistake” to allow ties between cryptocurrencies and the broader financial system to deepen amid warnings of a “global financial meltdown.”
The attitude of the Biden administration towards bitcoin and crypto has caused “many crypto entrepreneurs now tell me that they’re waiting for 2025 and a putative DeSantis regime for things to turn,” Carter added.
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However, some in the bitcoin and crypto space are more upbeat, predicting it will be the incumbent companies rather than crypto upstarts that fall behind.
Changpeng “CZ” Zhao, the chief executive of the world’s largest bitcoin, ethereum and crypto exchange Binance, has warned Wall Street giants are facing an “existential risk” if they fail to adopt crypto technology.
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