The US government’s ongoing crackdown on cryptocurrencies and crypto firms is causing concerns among industry experts, who argue that it could have a negative impact on innovation and weaken the dollar’s global position. The recent Wells notice issued to Coinbase by the SEC is just one example of the legal threats that crypto firms are facing in the US, and many believe that there could be more to come.
According to Mati Greenspan, the chief of crypto research firm Quantum Economics, US regulators have been unfriendly to crypto “since the beginning.” Some suggest that the recent collapses of crypto and startup-friendly banks, such as Silvergate, Silicon Valley Bank, and Signature Bank, are part of a larger scheme by regulators to “un-bank” the crypto sector, which has been dubbed “Operation Choke Point 2.0.”
Meanwhile, a March 20 economic report from the White House was highly critical of the merits of crypto assets, spending almost an entire chapter debunking their “touted” benefits. However, as more people begin to use crypto for cross-border remittances globally, there are concerns that a crackdown on crypto in the US could actually have the opposite effect on the dollar. By isolating the US further, it could weaken the dollar’s position as the global reserve currency.
Greenspan suggests that the White House should instead review the practices in the banking industry, rather than targeting the crypto sector. The recent action against Coinbase has been described as part of an “adversarial environment for the crypto industry” in the US, which could drive jobs, investment, and future innovation offshore to countries like Singapore, Hong Kong, and Australia.
Despite the concerns raised by industry experts, the exact reasons for the SEC’s targeting of Coinbase remain unclear. The SEC has declined to comment on the matter, leaving many in the crypto community uncertain about what the future holds for the industry in the US.