A Democratic presidential candidate is speaking out against the rising anti-crypto sentiment within the party. The candidate is blaming regulatory agencies’ “war on crypto” for the bank failures that occurred in March.
Robert Kennedy Jr., an environmental lawyer, opposed the Biden administration’s bailout approach in handling the ongoing banking crisis in recent days.
The War on Crypto
Kennedy supported an article written by Ellen Brown titled “How the War on Crypto Triggered a Banking Crisis” in a tweet on Tuesday. Brown’s article explained how the actions taken by the Federal Deposit Insurance Corporation (FDIC) and Securities and Exchange Commission (SEC) led to the downfall of Silicon Valley Bank (SVB), Signature Bank, and Silvergate Bank in March. The tweet said, “FDIC and SEC have no authority to wage an extra-legal war on crypto that leaves major banks as collateral damage.”
Crypto industry leaders are concerned that a “War on Crypto,” colloquially termed “Operation Chokepoint 2.0,” is taking place. They fear that it is a subtle attempt by the government to discourage the banking sector from serving crypto companies and to scare blockchain businesses offshore with unclear and arbitrary enforcement actions. Caitlin Long, the CEO of the crypto-friendly Custodia Bank, claimed last April that the SEC is punishing compliant crypto firms with a deliberate signal to “stay the fuck away.” Coinbase CEO Brian Armstrong has also suggested that Coinbase might move its headquarters outside the United States if there are regulatory challenges.
Even Barney Frank, a former US congressman and board member of Signature Bank at the time of its closure, claimed that the bank’s closure was unnecessary and meant to send an “anti-crypto message” to other banks.
While some crypto-supportive politicians have spoken up about the SEC’s “regulation by enforcement” approach, most are Republican. Congressional Democrats are becoming weary of the crypto sector and are beginning to question whether it has a legitimate use case. On Tuesday, the White House issued guidance to Congress recommending that they pass a 30% excise tax on Bitcoin mining as part of the federal budget to make miners pay for the “economic and environmental costs” they impose.
Kennedy’s Crypto Support
A respondent to Kennedy’s tweet criticized the presidential candidate for defending crypto and questioned his environmentalism given the “enormous amounts of energy” used by the technology. In response, Kennedy assured that this criticism was a “misunderstanding” and promised to write about the issue this week.
Kenedy has also spoken out against Central Bank Digital Currencies (CBDCs), the government-backed form of money that traditional crypto proponents frequently challenge as an invasion of privacy.
“A CBDC tied to digital ID and social credit score will allow the government to freeze your assets or limit your spending to approved vendors if you fail to comply with arbitrary diktats,” Kennedy argued in a tweet last month.
The candidate’s comments referred specifically to the central bank’s new FedNow payments service, which the Federal Reserve clarified days later that it is “not related to a digital currency.”
Feature Image Courtesy of People Magazine.